Chinese automakers aim for higher sales in Europe with five-star electric vehicles

SOLIHULL, England, Nov 21 (Reuters) – Chinese electric vehicle (EV) makers have set their sights on winning over European motorists and large corporate customers with more affordable cars equipped with high levels of safety and many high-tech features.

In recent months, several Chinese EVs have been awarded five stars by the European New Car Assessment Program (NCAP), an achievement that requires loading vehicles with active and passive safety features that go far beyond the legal requirements.

More are coming.

“All Chinese electric vehicle manufacturers want to get the Euro NCAP five-star rating to be more competitive in the European market,” said Brian Gu, president of Chinese electric vehicle manufacturer Xpeng (9868.HK).

Gu said Xpeng has spent the past three years building shops and service centers in Denmark, the Netherlands, Norway and Sweden – with some initial sales in Norway – ahead of the official launch next year of its P7 electric sedan and G9 SUV. (SUVs). ) in the four countries.

Chinese electric vehicle makers have recognized that safety plays an incredibly important part of the sales process, said Matthew Avery, director of Thatcham Research, an insurer-funded UK automotive research center and member of the Euro NCAP board.

The five-star Euro NCAP ratings are seen as the key to overcoming Europe’s remaining concerns about the quality of Chinese-made cars, after horrific crash test failures in 2006 and 2007 created the impression that Chinese cars were not secure.

Perhaps more importantly for sales, high safety ratings also open up the huge potential company car fleet market for Chinese electric vehicle makers.

Fleet sales make up around half of all car sales in major markets including Germany, France and the UK, and many corporate buyers place emphasis on safety.

“Fleet sales are very important, and many fleets have a mandatory five-star car purchase rating,” Avery said.

CAR RENTAL COMPANIES

Additionally, many fleets want to switch quickly to electric vehicles to meet sustainability goals. But corporate fleets have struggled to get enough EVs in Europe as supply chain issues have pushed wait times for some models to more than 12 months.

High demand for electric cars due to supply chain shortages has allowed European automakers to raise EV prices and focus more on retail customers, rather than customers such as car rental companies that have traditionally been less profitable for them.

This has created a window of opportunity for Chinese EV makers who have already stolen a march on most foreign rivals in China, by far the world’s largest market for EVs.

In October, for example, German car rental company Sixt (SIXG.DE) said it would purchase around 100,000 electric vehicles from BYD (002594.SZ), starting with its Atto 3 SUV which received the coveted five-point rating. Euro NCAP stars in the same month.

China’s Great Wall Motors (GWM) (601633.SS) received five stars in September for its WEY-branded Coffee 01 hybrid SUV and its ORA-branded Funky Cat electric sedan.

European automakers are also pursuing five-star ratings for their electric and hybrid vehicles, from BMW (BMWG.DE) iX to Volkswagen (VOWG_p.DE) ID.4 and ID.5. In October, Mercedes (MBGn.DE) achieved top marks for its EQE sedan, and its driver assistance features received the highest rating to date from Euro NCAP.

Chinese EV maker Airways has yet to put its U6 electric crossover through its paces, but it too is aiming for the highest score on offer, said Alexander Klose, who heads the automaker’s operations outside of China.

He said Airways has invested in extra safety features for the U6 to open up sales opportunities for European fleets, including car rental companies, when it goes on sale next year.

“There will be a natural demand for vehicles like ours that are fully equipped and very competitively priced,” he said, adding that Airways hopes to sell 30,000 electric vehicles in Europe in 2023, up from around 5,000 this year.

BASIC REQUIREMENT

French automotive consultancy Inovev said some 155,000 Chinese-made cars were sold in Europe in the first nine months of 2022, or 1.4% of the market. Chinese companies are on track to reach 150,000 cars this year, nearly double the 80,000 sold in 2021.

But nearly half of Chinese cars sold were electric vehicles, according to Inovev, giving them a 5.8 percent share of the European all-electric vehicle market.

Inovev vice president Jamel Taganza said all Chinese cars sold in Europe would become electric vehicles within a few years, with more low-cost models on the way.

By 2030, Inovev estimates that electric vehicles will make up 40% of new car sales in Europe and that Chinese brands will account for between 12.5% ​​and 20% of that all-electric market, with sales ranging between 725,000 and 1 .16 million vehicles.

“That’s a conservative forecast,” Taganza said. “But it could increase faster, especially if European automakers fail to respond to Europe’s needs for affordable electric vehicles.”

Getting a five-star rating is expensive for automakers because it means investing in additional safety features, from extra airbags to collision avoidance systems, driver assistance and driver monitoring.

Thatcham’s Avery said Chinese electric vehicle makers have actively engaged with Euro NCAP and are enthusiastically making the necessary investments to achieve the best ratings.

“Forget what you might think Chinese means inferior quality or inferior safety performance,” he said. “Their quality is now better than others.”

BYD is launching three cars in a handful of European markets and will add more models and markets next year, all of which are expected to have the best safety ratings, said Michael Shu, managing director of BYD Europe.

“We think a five-star rating should be a key requirement,” he said.

‘USE THAT ADVANTAGE’

NOW Great Wall Motor’s Funky Cat, meanwhile, will launch in Britain, Germany, Ireland and Sweden later this year.

Starting at around £32,000 ($36,330) in Britain, or about £5,000 cheaper than VW’s ID.3, the Funky Cat’s features include facial recognition to memorize seating preferences, driving assistance, rear view camera and wireless phone charging.

Toby Marshall, UK sales and marketing director for GWM’s ORA brand, said that if a car is well made, packed with features, has a high level of safety and is competitively priced, it no longer matters where. was built.

“These are the key ingredients that matter to car buyers,” Marshall said, as he showed off the Funky Cat at his office in Solihull in the English Midlands.

Bill Russo, head of consultancy Automobility Ltd in Shanghai, said the problem for many international automakers is that they have handed over the lead to Chinese rivals when it came to building low-cost electric vehicles.

“The only place on the planet where you will find an affordable EV today is China,” Russo said. “And they’re capitalizing on that advantage.”

($1 = 0.8808 pounds)

Additional mentions by Zoey Zhang in Shanghai and Giulio Piovaccari in Milan; Edited by David Clarke

Our standards: the Thomson Reuters Trust Principles.

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