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ℹ️ The article was first published on LinkedIn on 23.04.2024.

Welcome to the 13th edition of China EV Pulse,

an exciting chapter in our ongoing exploration of Chinas electric vehicle scene in Europe. Your passion for understanding Chinas EV innovations fuels our journey, and i'm here to bring you comprehensive insights into this rapidly evolving market. We'll explore cutting-edge trends, breakthrough technologies, and the dynamic forces shaping this sector. Join me as we uncover the future of electric vehicles in this latest issue of China EV Pulse.

Enjoy the read!

Sales of new energy vehicles (NEVs), which include electric cars, plug-in hybrids, and hydrogen vehicles, experienced significant growth for BYD in March. After the Chinese New Year festivities, BYD reported selling 302.459 NEVs in March, the second-highest number in its history, trailing only the 341.043 units sold in December. This represents an increase of 147% from February's 122.311 sales and a 46% rise year-over-year compared to March 2023.

The surge was driven by the sale of electric vehicles, with BYD delivering 139.902 electric cars in March, a 36% increase from the previous year and a 155% jump from February. BYD also set a record with 38.434 NEVs sold overseas, surpassing its previous high of 36.174 units in January. This reflected a 189% growth year-over-year and a 65% increase from February. In the first quarter of 2024, BYD sold 300.114 electric cars, which is 13% more than the same period last year but a 43% decline from the last quarter of 2023.

Li Auto also saw a rise in deliveries in March, with 28.984 units delivered. This represents a 43% increase from February and a 39% year-over-year rise, though still lower than January's pre-New Year numbers. In the first quarter, Li Auto delivered 80.400 vehicles, exceeding its revised forecast of 76.000 to 78.000. Despite a 53% increase year-over-year, there was a 39% decline from the fourth quarter of 2023.

Nio reported a similar upward trend in March, delivering 11.866 vehicles, a 46% increase from February and a 14% rise from March 2023. Nios first-quarter deliveries totaled 30.053 units, aligning with its recent forecast, and has delivered 479.647 vehicles as of March 31.

Xpeng nearly doubled its March deliveries compared to February, with 9.026 vehicles delivered, representing a 99% increase from February and a 29% increase from March 2023. The X9 MPV, launched in January, accounted for 3.946 deliveries in March, totaling nearly 8000 since its introduction. Xpengs first-quarter deliveries reached 21.821 units, within its projected range of 21.000 to 22.500 units, marking a 20% annual increase but a 64% drop from the last quarter of 2023.

Chinese automaker BYD is set to launch a new fully electric flagship sedan under its premium Denza brand, named the Denza Z9 GT. This shooting brake model features a long, wagon-like design with a distinct coupé-style rear, resembling the Nio ET5 Touring. This addition will be Denzas fourth model, following the N7 and N8 SUVs, and the D9 family van.

The Denza D9, known for its robust front design, is expected to be launched in the German market later this year. It is available in two configurations: a front-wheel-drive version with a 230 kW motor and an all-wheel-drive system with 275 kW. The battery has a capacity of about 100 kWh, with plug-in hybrid versions also offered.

Technical specifications for the Denza Z9 GT are not yet available, but reports suggest the vehicle will be introduced to the Chinese market this year. Shooting brakes are a relatively rare body style on German roads, despite Mercedes-Benz (Joint-Venture Partner) having some combustion engine models in this category, with plans for more electric shooting brakes from Stuttgart, where the Z9 GT was recently spotted. This could present a challenge for Mercedes-Benz, as the launch of the BYD Denza Z9 GT might create competition for its own electric shooting brakes.

Chinese tech company Xiaomi, primarily known for its smartphones, has released new details about the production and order figures for its first electric car, the Xiaomi SU7. CEO Lei Jun stated that demand for the vehicle is about three to five times higher than initially expected.

Despite Xiaomis strong partnerships and rapid production scaling, the unexpectedly high demand has presented some challenges. Electric Vehicles reports that the brand had surpassed 100,000 pre-orders just a few days after the cars launch. At the current production pace, Xiaomi could produce about 80,000 vehicles by year's end, indicating potentially long wait times for buyers. To meet the demand, Xiaomi will need to expand its factory, currently capable of producing 150,000 vehicles annually, with plans to double that capacity in the future.

However, this expansion is expected to start only next year, leading to questions about whether Xiaomi truly didn't anticipate such high demand.

Hongqi, the premium brand of Chinas FAW Group, aims to go global under the leadership of British designer Giles Taylor. The company's journey towards global expansion began in December 2018 with the unveiling of its first electric SUV, signaling a shift from combustion engines to all-electric vehicles by 2025.

According to Taylor, true luxury doesn't stem from excessive screens or flashy design, but from careful material selection and creating a harmonious space. This design philosophy is central to Hongqis E-HS9, an electric SUV that combines modern technology with a high level of comfort and quality.

Hongqi's E-HS9, available in six- or seven-seat configurations with battery capacities ranging from 99 kWh to 120 kWh, has a range of up to 515 km (WLTP). Measuring 5.2 meters in length, 2.01 meters in width, and 1.73 meters in height, it provides ample interior space. The European market will see the E-HS9 in its Exclusive Long Range variant, with an expected starting price of €102,995, with deliveries expected in the second quarter of 2024.

The Dongfeng M-Hero 1 is a electric SUV that cater to a niche market of those seeking power, luxury, and off-road capabilities rather than practicality, efficiency, and affordability.

With its massive size and striking performance, the M-Hero 1 makes a bold statement on and off the road. The vehicle is 4,987 mm long, 2,080 mm wide, and 1,935 mm high, with a wheelbase of 2,950 mm. Its imposing presence is matched by its power, boasting 800 kW (1,088 hp) and 1,400 Nm of torque. However, its substantial curb weight of 3,410 kg and a maximum load capacity of 510 kg demand careful consideration when planning road trips or transporting cargo.

Despite its immense size, the M-Hero 1 storage capacity is relatively modest, with a trunk offering 452 to 1,137 liters of space. Since its launch in China in October 2023, the M-Hero 1 has been sold over 3,000 times, including in a version with a range extender.

The M-Hero 1 also has a towing capacity of 2,500 kg and a roof load capacity of 150 kg (static) and 100 kg (dynamic). It offers a range of driving modes, including Standard, Sport, and Comfort, along with an Individual mode for personal customization. The vehicles large 142 kWh lithium battery provides a WLTP range of 450 km. However, charging this battery can take time, as the M-Hero 1 supports a maximum of 100 kW (DC) or 11 kW (AC), with a 30 to 80% charge taking 47 minutes.

Chinese automaker Chery is set to open its first European factory in Barcelona, aiming to produce electric vehicles. Chery, one of China's leading auto exporters, shipped 1.88 million units in 2023. The move to establish a plant in Barcelona has been in the works for some time, with earlier speculation about Cherys plans to enter the European market.

The Chinese manufacturer has entered into a joint venture with Catalan-based Ebro EV-Motors to produce vehicles under Cherys Omoda brand and Ebro at the Zona Franca in Barcelona. This agreement makes Chery the first Chinese automaker to establish a car factory in Europe, with an investment of 400 million euros from both public and private sectors.

The agreement was signed after months of negotiations and several trips to China by Catalan officials and Ebro representatives. This step marks the return of production to the former Nissan factory in the Zona Franca.

Pedro Calef, CEO of Ebro, remarked that this joint venture would bolster Cherys presence in Europe. He mentioned plans for a research and development center in Barcelona for European market certifications, with the goal of producing 150,000 cars annually by 2029.

Catalonia Trade & Investment has a dedicated China department based in Barcelona and works with offices in Beijing, Shanghai, and Hong Kong to foster dialogue between global companies and local authorities.

Unlike many European automakers, most Chinese car manufacturers seem inclined to continue producing combustion-engine vehicles while increasing electric vehicle (EV) production for more advanced markets. These combustion-engine vehicles will increasingly use alternative fuels like e-fuels to stay in line with global sustainability trends.

A document from the Chinese Ministry of Commerce indicates that vehicles with internal combustion engines (ICEs) will remain part of the automotive industrys development for some time.

Despite this continued focus on combustion engines, China plans to use them differently, integrating them into hybrid vehicles and those running on synthetic fuels. Jochen Siebert, Managing Director of JSC Automotive, suggests that conventional combustion engines will soon disappear, but they will persist in some hybrid models and vehicles powered by e-fuels.

Chinese automakers' approach to these issues varies. While focusing on EVs in their home markets, they could find significant opportunities in developing regions with combustion technology. The mixed strategy allows them to adapt to different market demands and regulatory environments.

The European Union is currently investigating whether Chinese automakers, particularly electric vehicle (EV) manufacturers, are gaining unfair competitive advantages through state subsidies, potentially leading to punitive tariffs. Chinese Minister of Commerce Wang Wentao has denied these allegations at an event in Paris, where representatives from major Chinese companies like Geely, BYD, and CATL were present. According to a report by N-TV, Wang claimed that Chinas automakers do not rely on subsidies.

"Chinas electric vehicle companies rely on continuous technological innovation, a well-established production and supply chain system, and full market competition for rapid development. They do not depend on subsidies to gain competitive advantages," Wang stated. He also rejected the EU and U.S. suggestions that China deliberately creates surpluses to pressure prices in the electric vehicle market.

While the overall market share of Chinese cars in Europe remains low, their presence in the EV segment is significantly higher. Given the EUs plans to ban the sale of new combustion-engine vehicles by 2035, the electric vehicle market is likely to become even more critical in the future. Several Chinese automakers are partially state-owned and receive direct financial support from the Chinese government, raising questions about market competition and state influence.

Chinese automakers are gaining ground in Germanys electric vehicle (EV) segment, with nearly nine percent of battery-electric vehicles now from brands like Nio, BYD, and MG. This shift has caught the attention of the German automobile club ADAC, leading to comprehensive tests to assess safety, performance, and quality. Karsten Schulze, ADAC Technik president, highlighted the need for thorough evaluation given the increasing presence of these new entrants.

ADACs autotrack results from the past three years show that Chinese cars are serious competitors, with all but two of 13 models achieving five-star ratings in Euro NCAP crash tests. They also excelled in safety tests involving electronic stability programs (ESP). The vehicles are praised for their quality materials and craftsmanship, but concerns remain about unreliable assistive systems and complex touchscreens.

Despite these issues, Chinese vehicles are generally priced lower than European counterparts, although this might come with potential downsides like depreciation and repair costs. The current share of Chinese-made cars in Germany is less than two percent of all sales, contradicting claims of an impending "flood" of Chinese vehicles. However, this number could grow, especially since some European brands also rely on Chinese manufacturing.

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Sebastian | China EV Pulse