2 & 4 WHEELS: CHINESE BRANDS ASSAULTING EUROPE

Chinese Electrification Lands in Europe: An Ode to Innovation and Healthy Competition

The automotive industry is currently undergoing an exciting transformation in Europe, with the arrival of Chinese electric vehicle (EV) brands. Actors such as MG Motor , Polestar, Link & Co, BYD for cars, Niu And Wuxi Sundiro for two-wheelers, are entering the European auto and motorcycle scene, bringing a breath of fresh air, innovation and competition.

Key Figures: Growing Electrification

In Europe , the electric vehicle market is booming. By 2022, EV sales increased by more than 150% compared to the previous year. According to forecasts from the International Energy Agency (IEA) , the EV fleet should reach 145 million vehicles by 2030. excluding two wheels , i.e. 7% of all vehicles in circulation.

The arrival of Chinese EV brands will contribute to this exponential growth. MG has already captured a good share of the European market with 55,000 units sold in 2022 *, followed by Polstar 32,000* and Link & Co 26,000*. In addition, 2 wheels are not left out with dynamic brands like Niu And Wuxi Sundiro present at European exhibition EICMA in Milan which offers urban electric scooters, ideal for sustainable city mobility, in particular the new Sundiro Hawk Pro of which Jack Chen - ISM of the brand announced the arrival to us a few days ago.

*According to a study by Inovev

China's Advantages: Innovation and Competitive Cost

China has become a major innovation hub in the field of EVs, with undeniable advantages:

1. Production Scale : China has the world's largest electric vehicle production base, enabling large-scale production and competitive manufacturing costs;

2. Massive Investments in R&D : Chinese companies have invested heavily in research and development, creating cutting-edge battery, autonomy and autonomous driving technologies;

3. Affordable prices : Chinese brands have managed to offer high-quality EVs at more affordable prices, making them accessible to a wider audience.

78% of Chinese decision-makers are not considering a specific marketing strategy as part of their development in Europe

This is the main problem of Chinese brands on the European market, apart from a few rare exceptions, they are almost devoid of real differentiating marketing strategies and customer culture. However, price can no longer be the only lever because the gap continues to narrow. One of the studies carried out during the first half of 2023 by Premium Consulting Strategist on a panel of 150 Chinese decision-makers wishing to develop in Europe indicated that 78% of them were not considering a specific strategy in this market.

Tesla: A Formidable Competitor

The arrival of Chinese brands in Europe not only causes traditional manufacturers to react, but also Tesla , the American pioneer of EVs. You're here already has a solid presence in Europe with its very popular models, such as the Model 3 and the Model Y. Faced with this new competition, Tesla is being responsive, with the expansion of its Supercharger network and price reductions to remain competitive , up to around €10k on the Tesla Model 3 for example.

The Impact on European Brands

European automobile brands, such as Volkswagen, BMW, Audi and Renault are also taking steps to maintain their position in the EV market. They are accelerating the production of electric models, investing heavily in battery technology and offering diversified EV ranges to meet growing demand.

This increased competition can only be beneficial for European consumers, who will have a wider choice of high-quality electric vehicles at competitive prices.

It will also encourage major innovations necessary for the development of the sector:

• bi-directional charging: Also called V2H or V2L (Vehicle to Home or Vehicle to Load) which allows an electric car to provide electricity to a residence or building, while V2L allows an electric car to transfer electricity directly to another electric car;
• solid batteries: Solid-state batteries represent the next phase of battery innovation for electric vehicles. They offer many advantages, including increased safety, faster charging, and better energy density compared to conventional lithium-ion batteries. Additionally, unlike lithium-ion batteries, solid-state batteries contain no flammable liquids and pose no risk of leakage or degradation, making them more reliable and safe for use in electric vehicles. ;
• dual chemistry batteries: Consider having your vehicle equipped with two types of batteries: one dedicated to short trips and the other to long trips. This is the concept behind dual chemistry batteries, which merge the benefits of both worlds into one package. This combination creates a battery with extended life, better durability and superior performance compared to single composition batteries. Tesla and BMW served as a testing ground for particularly impressive range tests using Gemini dual-chemistry batteries developed by start-up Our Next Energy (ONE);

and will accelerate the transition towards cleaner and more sustainable mobility.

Well beyond that, the other challenge of the sector is also digital transformation, as evidenced by the exciting reflections and innovations presented by Marco Marlia - CEO and Co-founder of MotorK , 1st technology company sales and marketing automobile in Europe these coming days at CONNECT EUROPE in Berlin.

In conclusion, the arrival of Chinese electric vehicle brands in Europe is an exciting opportunity for consumers, manufacturers and the environment. With a diverse offering, competitive prices and constant innovation, these brands will help accelerate the transition to electric mobility and shape the future of automobiles in Europe.

#CONNECTOROPE #MOBILITY #EUROPE

Paris, September 14, 2023 -

By Yoan Bastos, President of the international consulting firm Stratège ®