Decoding the Dynamics of China's EV Market Expansion

ℹ️ The article was first published on LinkedIn on 14.11.2023.

Greetings in our latest journey with the fifth issue of China EV Pulse.

It's truly inspiring to witness your passion and dedication as we explore the dynamic realm of Chinas electric vehicle initiatives in Europe.

My commitment to you remains unwavering: providing deep and insightful analysis of the Chinese EV market, highlighting the most recent trends, breakthrough technologies, and the evolving dynamics of this exciting industry.

Let's embark on this futuristic journey together, with the fifth edition of China EV Pulse. Happy reading!

In todays edition of China EV Pulse, we have the privilege of featuring insights from Herbert Diess, the former CEO of the Volkswagen Group. In a recent conversation with motor.at, he shared his candid views on Chinese electric vehicles.

He stated, 'The Chinese [auto industry] is overestimated. There's a lot of half-baked stuff out there, and they face many challenges. However, there are a few good Chinese brands. Some are just starting to enter Europe, like Li Auto, which offers a hybrid with a 200 km range and a small combustion engine. Huawei is also set to make an entry, and BYD is a brand to be taken seriously. But out of the other 100 [Chinese brands], 80 are not to be taken seriously. European automakers are being too critically viewed in public opinion. There's no reason why German car companies shouldn't be able to withstand this competition.'

His perspective offers a critical yet balanced view of the current state of the Chinese EV market, acknowledging both the challenges and the potential of certain key players. This insight is particularly valuable as we continue to explore the evolving landscape of electric vehicles in China and their impact on the global stage.

It's time to examine the sales figures of Chinese brands, revealing a generally positive trend in the overall market, albeit with varying performances among individual brands.

In the realm of electric mobility, Chinese automaker BYD has hit a new milestone: For the first time in October, the company sold over 300,000 New Energy Vehicles (NEVs), marking a 38.57 percent increase from last year and a 5 percent rise from September. This achievement signifies the sixth consecutive month of record-breaking sales for BYD. Notably, pure electric vehicle sales soared with 165,505 units sold in October, a 60 percent increase year-over-year. Plug-in Hybrid Electric Vehicles (PHEVs) also saw a rise, with 135,590 units sold, up 19 percent from last year, despite a slight 0.09 percent dip from September.

Leapmotor, a Chinese electric vehicle startup, also reported a record month, delivering 18,202 vehicles. This represents a 159 percent increase from the previous year and a 15 percent rise from September. In the first ten months of the year, Leapmotor delivered a total of 107,029 vehicles, marking a 13 percent year-over-year increase.

Li Auto, a manufacturer of Electric Range Extended Vehicles (EREVs), surpassed the 40,000 vehicle delivery mark for the first time in October, marking the seventh consecutive record month for the company. Li Autos current models, the L7, L8, and L9, all EREVs, are gaining more presence in the market than pure electric vehicles. Deliveries surged by 302 percent compared to last year and increased by 12 percent from September.

Neta Auto, the electric vehicle brand of Chinese manufacturer Hozon Auto, experienced a decline in deliveries in October compared to September, making it one of the few local EV manufacturers with decreasing numbers. Neta delivered 12,085 vehicles in October, a 33 percent decrease year-over-year and a 9 percent drop from September. In the first ten months of the year, Netas deliveries totaled 109,855 vehicles, a 15 percent decrease from the previous year.

Nio, another Chinese electric vehicle manufacturer, saw an improvement in October deliveries compared to September, though not as significant as some of its local competitors. Nio delivered 16,074 vehicles in October, a 60 percent increase year-over-year and a 3 percent rise from September. The deliveries included 11,086 electric SUVs and 4,988 electric sedans.

XPeng achieved a delivery record in October as production capacity for its new SUV model G6 ramped up. The Chinese electric vehicle manufacturer delivered 20,002 vehicles in October, the first time surpassing the 20,000 mark. This represents a 292 percent increase year-over-year and a 31 percent rise from September. Deliveries of the Xpeng G6 significantly increased, with 8,741 units in a single month, making it the best-selling electric SUV in its price segment.

Zeekr, the premium electric vehicle subsidiary of Geely Holding Group, delivered 13,077 vehicles in October, a 29 percent increase from the previous year and a 9 percent rise from September. Alongside record deliveries, Zeekr also reported a record number of orders in October, though the exact number of orders was not disclosed. In the first ten months of the year, Zeekr delivered 92,105 vehicles, an 86 percent increase year-over-year.

Deepal, a collaboration between CATL, Huawei, and Changan, has launched the S7 520Pro, an electric SUV priced at around €23,300. The S7 520Pro features a sleek design with frameless doors and a 2900 mm wheelbase, classified as a mid-sized SUV.

The interior boasts a 15.6-inch central screen with Deepal's OS, a 53-inch AR-HUD powered by Qualcomm Snapdragon 8155, and a Level-2 driver assistance system. While more affordable than its predecessor, the S7 520Max, the 520Pro model scales back on some features.

The vehicle is powered by a single electric motor with 190 kW power and 320 Nm torque, achieving 0-100 km/h in 6.7 seconds. Its 66.8 kWh battery offers a 520 km range per the CLTC standard. Currently, the S7 520Pro is only available in China.

Chinas electrified vehicle market (EVs and PHEVs) continues to grow robustly, with six million units delivered in the first nine months of 2023, including 2.4 million in the third quarter alone. In contrast, Western Europe recorded 0.75 million units, and the USA surpassed one million units in the same period.

EVs and PHEVs now represent 26.3 percent of all new car registrations in Western Europe, a slight increase from 20.9 percent in 2021. The market has seen a shift from PHEVs to more competitive EV models, influenced by reduced subsidies, especially in Germany.

As of September 2023, plug-in vehicles accounted for nearly a quarter (24.4 percent) of all new cars in Western Europe, indicating a growing preference for electrified vehicles in the region.

Hyundai Group is developing its own Lithium Iron Phosphate (LFP) battery cells to create more affordable electric vehicles. This initiative, in collaboration with South Korean battery manufacturers, aims to reduce reliance on Chinas dominant LFP market. Targeting integration in small and medium-sized EVs by 2025, Hyundais move into LFP battery production marks a strategic shift towards cost-effective and robust battery technology, aligning with their broader investment in diverse battery types including solid-state batteries.

BYD, the Chinese automotive giant, is reportedly setting up its first European electric vehicle factory in Hungary, according to German media sources. While BYD maintains an official stance of revealing the location by year-end, insider sources suggest Hungary as the chosen site.

This speculation aligns with BYDs recent initiation of EV sales in Hungary and its existing presence in the country, where it has expanded its electric bus production capacity significantly. The decision, if confirmed, marks a strategic expansion for BYD in Europe, furthering its footprint beyond the 19 European countries it currently serves and complementing its planned battery assembly plant in Hungary.

CATL, a leading battery manufacturer, has inaugurated a new 30 GWh battery factory in Guian New District, Guizhou Province, China. This facility, notable for its advanced production technology and speed, is designed for both electric vehicle batteries and stationary applications. With an impressive 95% automation rate, the factory can produce one battery cell per second and a complete battery pack every 2.5 minutes. The initial capacity of 30 GWh is just the first phase, with plans to double this to 60 GWh in the future.

As of August, CATL's total installed production capacity was 158.3 GWh, marking a 54.4% increase from the previous year and solidifying its global market dominance with a 36.9% share.

A significant challenge in the biofuel sector is ensuring that biofuels imported into countries like Germany meet the same stringent sustainability standards as domestically produced fuels. This discrepancy in control standards poses a risk where fuels declared as sustainable may not actually meet the required criteria.

A notable incident highlighting this issue occurred earlier this year, involving Chinese biofuel made from waste and cooking oil. This biofuel was incorrectly and illegally labeled as an advanced biofuel, raising concerns about the authenticity and environmental integrity of imported biofuels.

Such incidents undermine trust in the biofuel market and potentially distort the environmental benefits these fuels are supposed to offer.

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Sebastian | China EV Pulse