Chinese BEV dominance – opportunity or threat?

The transition to BEVs has also led to a very real challenge from Chinese EV manufacturers who are entering Europe and the UK with their low-cost, high-quality, technologically-enhanced electric vehicles.

There appears to be four main ways in which Chinese brands are going to try to become dominant in the West.

Firstly, through the acquisition of Western brands, giving Chinese car makers direct access to a legacy firm with an existing network and established overseas awareness amongst consumers. The big example in the UK would be MG.

The second route is the rebadging of cars with Western logos seen by the likes of Chevrolet in Latin America. This is becoming useful practice in developing markets where the Western brands are eager to offer cheaper cars in a competitive package.

The third and most challenging method is the direct introduction of the local brand and the current strategy being employed by Neo and BYD in Europe. In addition to the usual high cost of introduction, this approach requires significant investment in brand building and customer trust as many Chinese brands remain unknown in Western markets.

And finally, technological collaboration is a trend that started quite recently and has seen a cooperation between Chinese brands and Western brands. The development of new models and technologies can be seen in two examples of strategic partnerships e.g. between the Volkswagen Group and Xpeng to develop new Volkswagen branded EVs while Leapmotor recently signed a memorandum of understanding with Stellantis.

In the latest Asset Finance Connect webcast, sponsored by Bynx, AFC head of content, David Betteley, spoke to a panel of auto experts to discuss a future in which China dominates the global electric vehicle ecosystem, and the implications and likely next steps for Western auto ecosystem participants. The accompanying summary and analysis of the webcast panel discussion is now available to view here. 

The panel, including Michael Dunne, CEO of Dunne Insights, Ian Plummer, commercial director at Auto Trader, and Tony Whitehorn, former chairman and CEO of Hyundai Motor UK, discussed the scale of dominance of Chinese manufacturers and their supply chains in the auto ecosystem, the strengths and weaknesses of Chinese OEMs, the implications for Western OEMs and how they, along with the government, are likely to respond, and looking at the opportunities for the European auto industry – fleet finance providers, dealers and OEMs.

Describing the Chinese EV sector as an ‘Automotive Godzilla’, Dunne believes that China is a global powerhouse that has accumulated overwhelming superiority when it comes to electric vehicles and battery technology.

The expert webcast panel discussed how:

• China is a global powerhouse that dominates EV production
• China has a monopoly on mining and processing the raw materials for EV batteries
• China needs access to European car markets for profit and will do whatever it takes to win the global EV race

You can read the summary of proceedings and David’s analysis in full here.