The Role of Chinese EVs in Shaping European Mobility

ℹ️ The article was first published on LinkedIn on 12.12.2023.

Welcome to the thrilling new edition of "China EV Pulse",

our seventh journey together. Your enthusiasm and dedication to exploring Chinas electric vehicle advancements in Europe are truly inspiring. I'm committed to providing you with in-depth and insightful coverage of the Chinese EV market, focusing on the latest trends, innovative technologies, and the ever-evolving dynamics of this exciting sector.

Join me as we dive into the future of electric vehicles with this latest issue of China EV Pulse. Enjoy your read!

Burkhard Weller, a notable automotive industry figure, has recently added MG, a Chinese car brand, to his dealership portfolio, a significant shift from his previous reluctance to represent Chinese automakers. This decision was influenced by the rapid development of Chinese brands like Nio, BYD, and MG.

Weller was particularly drawn to MG for its recognizable brand and competitive pricing strategy, which he sees as more appealing in the European market compared to higher-priced Chinese vehicles.

After visiting SAICs production facilities in China and observing the manufacturing process of MG vehicles, Weller is confident in the quality and potential of MG, noting its rapid advancement in meeting European standards.

He acknowledges the growing challenge from Chinese brands in Europe but remains optimistic about the adaptability and future prospects of European manufacturers, especially with advancements in electric vehicle technology.

In November, China achieved a significant milestone in its electric vehicle (EV) market, with sales of electric cars and plug-in hybrids surpassing one million units for the first time on a monthly basis. According to the China Association of Automobile Manufacturers (CAAM), approximately 1.026 million New Energy Vehicles (NEVs) were sold last month. This figure represents an increase of about 70,000 vehicles from the previous record set in October 2023, marking a 7.3 percent growth. Compared to November 2022, when 786,000 NEVs were sold, this is a substantial 30 percent year-over-year increase.

New Energy Vehicles in China encompass plug-in hybrids, battery-electric vehicles, and fuel cell vehicles, with the latter playing a minor role at 1000 units in November.

Teslas standard-range Model Y has sold out in China, as revealed by a poster shared by Tesla salespeople, indicating the company's success in meeting its ambitious 2023 global delivery target of 1.8 million vehicles. This development suggests that new orders for the standard-range Model Y in China will now face delivery times extending into the next month.

Tesla, maintaining its sales goal for the year, operates a significant factory in Shanghai, which not only serves local customers but also acts as an export hub. This facility, with an annual capacity exceeding 950,000 vehicles, is Tesla's largest globally.

Despite the sell-out of the base Model Y, Tesla's China website has yet to update information on wait times. The Model Y is available in three versions in China, with varying wait times for each. Additionally, the Model 3 is offered in two versions, also with specific wait times for each.

Mercedes-Benz Group China Ltd. and BMW Brilliance Automotive Ltd. have joined forces to establish a joint fast-charging network in China. This 50:50 joint venture aims to provide premium charging services to Chinese drivers, as announced in a recent press release by both manufacturers.

By the end of 2026, the plan is to build a charging network with at least 1000 stations and around 7000 fast-charging points, utilizing cutting-edge charging technologies. The first of these fast-charging stations are expected to be operational by 2024 in regions with the highest density of electric and hybrid vehicles in China.

Chinese companies are rapidly expanding their electric mobility production capacities, particularly in batteries, with the global market expected to grow significantly by 2030. According to a study by Roland Berger and RWTH Aachen, a large portion of these lithium-ion batteries will be used for electric vehicles. However, China is building overcapacities in battery production, potentially affecting the European and global markets.

Consultant Wolfgang Bernhart highlights the dominance of Asian manufacturers in the battery sector and the challenges posed by different production conditions and subsidies in these countries. China's current production capacity far exceeds global demand, and this surplus is likely to impact the European market due to political barriers in the USA. European companies must compete in price and quality to remain competitive.

Despite these challenges, Bernhart believes Europe can produce batteries independently and cost-effectively, considering transport and tariffs. The EU is scrutinizing China's state subsidies for their impact on market competition, and new EU regulations starting in 2024 will emphasize sustainability in battery production.

Marcel Münch, an expert on mobility and innovation trends in China, explains the unique dynamics of the Chinese car market, particularly regarding license plates and their impact on electric vehicle (EV) adoption. In China, obtaining a license plate can be a costly and challenging process, sometimes reaching upwards of ten thousand euros.

There are two types of plates: blue for conventional cars and green for electric vehicles. Previously, acquiring a blue plate for conventional cars often involved a long wait, sometimes years, and even a lottery system. However, the queue for green plates for EVs and plug-in hybrids is shorter, making it easier and quicker to obtain a plate for these vehicles. This pragmatic approach has become a significant incentive for many to purchase an EV.

This strategy has been effective, as more than half of the world's EVs are now in China, with an estimated 14.6 million EVs and hybrids expected by the end of the year. According to the Stuttgart-based research institute ZSW, there are around 27.7 million EVs worldwide. Beyond the easier access to license plates, there are several other factors in China that favor EVs, including purchase incentives, local benefits, and various premiums, as summarized by Münch. These measures have contributed to China's leading position in the global EV market.

Wan Gang, a former Audi engineer well-acquainted with Germany, transitioned to a significant role as China's Minister of Science and Technology in Beijing. In this position, he conceptualized China's electric vehicle (EV) subsidy program. This program, under his guidance, has evolved into a contentious issue between the European Union and China, highlighting the complexities and challenges in the global EV market and international trade relations.

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Sebastian | China EV Pulse