30/05/2024 – 16:18 GMT+2
Chinese EVs have a competitive edge when it comes to their European counterparts because they cost less and offer more features as standard.
ADVERTISEMENTChinese electric vehicle (EV) manufacturers are already ahead of the game compared with European car makers, with several brands such as Chery, BYD and Great Wall Motor (GWM) steadily gaining market share in Europe.
Now, they may be ready to take things to the next level, with the three producers planning 20 model launches over the next five decade. The move is expected to less the hold European EV and traditional car makers have on the European market, as well as cut the share of other foreign EV giants’ such as Tesla.
Chinese EVs are much cheaper than European models
The super high cost of new EVs in Europe is one of the main reasons Chinese-made models are popular. The average price of a battery electric vehicle was about €45,999 in 2023, according to the European Commission.
In contrast, Chinese EVs are much cheaper, and have many added extras as standard. A BYD Dolphin, for example, would cost around €29,964.26 so quite a difference from price compared with its European counterpart.
That means Chinese car makers are in a good position to attract Europeans looking for a low emission car but don’t want – or can’t afford – to pay too much for it.
How are Chinese EV makers taking over the European market?
Several Chinese EV makers have spent years studying and researching the European market, in order to build an expansion strategy ahead of making a definitive move. This has given them unique insights into consumer behaviours, market gaps and pain points.
It has also allowed them to pick and choose suppliers, distributors and other key people familiar with the industry carefully.
One drawback around Chinese EVs in Europe is awareness, with potential buyers not having heard of Chinese car makers. This has meant companies have had to increase spending on marketing and sales, in order to grow brand awareness. They have also achieved this by sponsoring several high-ticket events such as sporting ones.
Chinese car manufacturers have also identified other pain points for EV buyers, such as repair and maintenance services. They have reportedly taken swift and decisive steps to provide more solid solutions for these. The services are particularly important for fleet buyers and also help to improve resale values.
As a bonus, they are also a major consideration for first-time EV buyers who may not be entirely convinced of the benefits of EVs yet. Hence, EV makers who are providing robust servicing and maintenance automatically have an edge. The EV manufacturers have also tightened their safety and regulatory standards.
High demands from home market helps when selling in Europe
Chinese customers have high expectations and that is useful when manufacturers are trying to enter the European market. Demands for a good product are already high.
Mark Wakefield, global co-leader of the Automotive and Industrial practice at AlixPartners, said, as reported by National Public Radio: “Chinese customers are generally more styling focused and more technology focused. And I don’t just mean like connecting your iPhone to the center screen.
“I’m talking things like assisted driving. So all of these things that help you keep the lane and help you drive semi-autonomous. The takeaway rate on those features is much higher in China than it is in the US, for example.”
