Chinese Electric Car Expansion in Europe: Hurdles and Strategies
The dominant Chinese electric car manufacturers, who have established a strong presence in their domestic market, are now aiming to conquer international markets, with Europe being a primary focus. However, their initial attempts at expansion are revealing that European customers are relatively unfamiliar with Chinese car brands and often view them with skepticism.
According to research conducted by Inovev, the share of Chinese electric cars among total electric vehicle sales in Europe has risen to 8% from this year’s beginning, showing improvement from last year’s 6% and the preceding year’s 4%. Allianz, an insurance company, predicts that at least 11 new Chinese electric car brands will enter the European market by 2025. Yet, the early entrants in this market among Chinese manufacturers have encountered difficulties in making their products successful in Europe.
Firstly, customs duties, certification expenses, and logistical costs are inflating the prices of Chinese electric cars exported to Europe. As a result, they are no longer able to offer as competitive prices as they do in their home market. The brand MG, previously recognized in the British market and now owned by the Chinese manufacturer SAIC, is selling its electric vehicles in Europe but faces logistical challenges that significantly delay the delivery of vehicles to the region. Representatives from the Chinese startup Aiways added that adapting electric vehicles to suit European preferences also increases the cost for the local market. For instance, if European buyers accustomed to long journeys demand larger battery capacities, it considerably hikes the cost of electric cars.
The MG case, while atypical for the European market, reflects the general unfamiliarity of European consumers with Chinese car brands. A survey conducted by YouGov in Germany last year revealed that only 14% of respondents were aware of the existence of BYD—the second-largest electric car manufacturer after Tesla and the largest producer of plug-in hybrids worldwide. The relatively young Chinese brand NIO managed to capture 17% awareness due to its early European expansion, while Geely’s Lynk & Co secured 10% and XPeng held 8%. Interestingly, among the respondents who were aware of these Chinese brands, only 1% expressed a desire to buy a Chinese electric car. In comparison, 95% of the focus group in Germany were aware of Tesla’s products, and every tenth respondent expressed interest in purchasing a Tesla electric car.
Chinese companies are employing various strategies to build trust among European buyers. Many are enhancing the passive safety features of their vehicles beyond the requirements of European certification authorities. ZEEKR is focusing on displaying their electric vehicles in European dealer showrooms and establishing personal contact with consumers. Additionally, GAC, the world’s third-largest producer of electric vehicles in the second quarter of the year, recently opened a design bureau in Milan to tailor their European-market-oriented models according to the preferences of local customers.
Author Profile
- I'm Martin Harris, a tech writer with extensive experience, contributing to global publications. Trained in Computer Science, I merged my technical know-how with writing, becoming a technology journalist. I've covered diverse topics like AI and consumer electronics, contributing to top tech platforms. I participate in tech events for knowledge updating. Besides writing, I enjoy reading, photography, and aim to clarify technology's complexities to readers.
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