Chinese EV companies fight against European carmakers on their home lawn

This week Germany hosted one of the world’s biggest car shows, but in the heart of the European auto industry, it was a Chinese electric car company aiming to outdo some of the region’s biggest brands on their hometown lawns.

The IAA Mobility Conference in Munich was filled with businesses with huge stands showing off the latest cars and technology. Some of the biggest displays come from Chinese electric car companies, highlighting their ambitions to expand beyond China.

Europe has become a focus for Asian companies. This is a market where traditional carmakers are seen to be lagging behind the development of electric vehicles despite increasing the number of newer cars being released. at the same time, Teslawhich has long been considered a market leader in electric vehicles, but sales have been declining in the region.

Despite the Chinese EV makers facing European Union tariffs, the world’s second-largest economy athletes responded to increased competition by setting aggressive sales and expansion targets.

“Xpeng’s current growth is faster than we expected,” he said, CEO of Xiaopeng xpeng He spoke to CNBC in an interview this week.

The Chinese automaker, who spoke to CNBC at the IAA show, shows their ambitious expansion plans.

Xpeng said in an interview that the company is about to launch a mass market Mona series in Europe next year. In China, Xpeng’s Mona car is worth just under $17,000. Bringing this to Europe adds some serious price competition.

Meanwhile, Guangzhou Automobile Group (GAC) aims to grow rapidly in sales in Europe. Wei Haigang, president of GAC International, told CNBC that the company is aiming to sell around 3,000 cars in Europe this year. Leapmotor He also attended his position.

There are indications that Chinese players have made early on their way to Europe. According to Jato Dynamics, market share for Chinese car brands in Europe almost doubled in the first half of 2024 and the same period in 2024 and the same period in 2024.

“The substantial presence of Chinese electric vehicle (EV) manufacturers in IAA mobility shows an increase in ambition and confidence in the European market,” Murtuza Ali, senior analyst at Contope Research, told CNBC.

Many Chinese auto companies, like Tesla, position themselves as technology companies, and their cars emphasize that.

Many electric vehicles have large screens equipped with flashy interfaces and voice assistants. Additionally, some companies include additional gadgets to seduce buyers.

For example, the Aion V in GAC had a refrigerator and massage function as part of the seating.

This is one way that Chinese players have tried to differentiate themselves from legacy brands.

“The success potential of Chinese automakers is strong, especially as they have an advantage in terms of affordability, battery technology and production scale,” said Ali of Counterpoint.

Legacy automakers have tried to bending their muscles with IAA VolkswagenBMW and Mercedes are in the biggest position at the show. Mercedes in particular had advertisements displayed at the front door of the event.

BMW, like Chinese players, has focused on technology by discussing the so-called “superbrain architecture” that replaces hardware with centralized computer systems. BMW and Chipmaker Qualcomm, which introduced the IX3 at the event, have also announced that they will support driving software jointly developed by the two companies.

Volkswagen and French car company Renault also showed off several new electric vehicles.

Regardless of product blitz, there are still concerns that European companies are not moving fast enough. BMW’s new IX3 is based on the electric vehicle platform that first debuted two years ago. Meanwhile, Chinese EV makers have become quick to unveil and launch new models.

“Legacy’s structure and commitment to incrementalism slows down the ability to build and utilize a robust EV ecosystem, leaving rivals moving fast,” said a professor of business management manager at Santa Clara University.

European cars have a strong brand history, and their CEOs acknowledged and welcomed the competition in an interview with CNBC this week, but the Chinese are not disappointed.

“European automakers still have a great brand value and legacy. The challenge for them is to achieve large-scale production and adopt new technologies faster,” says Ali of Autonpoint.

“The Chinese certainly aren’t waiting for everyone to catch up and are making huge profits.”