The share of Chinese brands in European markets was almost ten percent last year, almost double year-on-year, as calculated by the French consulting company Inovev. They sold over 152,000 cars in Europe, hundreds of which were also bought by Czechs. Among the most successful exporters is MG, a formerly famous British manufacturer that was taken over by China’s state-owned behemoth SAIC in 2007 and returned to prominence. MG in the Czech Republic has entered into a partnership with the dealer Auto Palace.
The potential of Chinese brands in Europe is enormous, Inovev estimates a twenty percent share of the electric car market by 2030. Conversely, the share of European brands may drop from the current two-thirds to less than half.
Among the specific models that compete with European electric cars, we can mention, for example, the MG4. A German customer will pay roughly seven hundred thousand crowns for an electric hatchback, the price of a comparable ID.3 from Volkswagen hovers around the million mark. In a category similar to Škoda’s Enyaq iV, the Chinese manufacturer Aiways has been offering its U5 SUV since last year. It offers a range of over 400 kilometers and a price of around forty thousand euros, roughly 948 thousand crowns.
The price of the Enyaq model exceeds 1.2 million crowns, but in a more equipped version it can even exceed the 1.5 million mark. For that, you can buy a “Chinese Rolls-Royce”, a large SUV e-HS9 of the brand Hongqi, or Red Banner belonging to the category of luxury electric cars. “It was created by a former Rolls-Royce designer, so it has a similar style and supposedly decent quality,” noted Michal Dokoupil, an expert from Svět motorů magazine.
In the lower category, the Chinese are building the small hatchback ORA Funky Cat from Great Wall against the electric Peugeot e-208. The car, whose price should be around nine hundred thousand crowns, will be offered by businessman Emil Frey, who also operates in the Czech Republic.
Not all expanding Chinese manufacturers are doing well. For example, the Enyaq-sized EV6 SUV from Skyworth, which mainly makes low-cost electronics, completely failed crash tests. It costs around 39 thousand euros in Germany.
“Chinese vehicles supplied to the European market are typically a quarter cheaper than European ones of comparable size. In the Chinese market, these differences can be even more pronounced,” says Zdeněk Petzl, executive director of the Automobile Industry Association. “There is no doubt that Chinese manufacturers have made considerable progress over the last decade and in many respects the best models on offer are close to the standards European customers are used to,” he adds.
The Chinese are not limited to exports. The BYD car company – an acronym for Build Your Dreams – is planning to build a factory for the production of electric cars in Europe. In the meantime, it will transport them to Europe through its own naval fleet, for which it is already buying ships. In Hungary, BYD has been producing electric buses for many years.
The Chinese giant Geely also has big plans, which includes brands such as Lotus, Volvo and Zeekr. “Geely has been successfully selling Lynk & Co plug-in hybrids in Western Europe for a long time and is also starting a new one with its main brand Geely Geometry. It already has a representative in the Czech Republic, sales should start in the spring,” says Dokoupil. The Chinese brands Hozon, Leapmotor and Li Auto should also enter the European markets this year.
The Chinese company NIO has started the construction of a network of stations for the exchange of discharged batteries with charged ones. Accumulators are produced in their own factory in Hungary. So far, it sells in Denmark, Germany, the Netherlands, Norway and Sweden – similar to competitors XPeng and BYD. “NIO is by far the best-known of all Chinese startups, it has already introduced models tailored to Europeans – the NIO ET5 Touring – and is preparing an entire low-cost brand aimed at Europe,” adds Dokoupil.
The rise of Chinese brands in Europe is also reflected in the emerging market for used electric cars. “Used cars from China are still a rarity on the European market with a negligible share of sales. But the growth trend is clear, 1242 Chinese second-hand cars were sold last year, almost three times more year-on-year. With the knowledge that other brands will be opening their offices, sales of Chinese used cars will certainly increase in the coming years as well,” says Jan Vavřík, spokesperson for Carvago car dealerships. In their network last year, after by far the most successful used models EHS and MG5, the Seres 3 of the Dongfeng brand performed best with 125 cars sold. The median price was 35,000 euros.
The expansion of Asian players threatens not only European car companies, but also the network of their suppliers, including Czech ones. “In the case of most Asian investments, we see proven suppliers also coming with larger investments. It will be difficult for Czech companies to establish themselves in terms of price, but also the complexity of the supplier relationship for Chinese manufacturers,” states the automotive expert of the consulting company EY Petr Knap.
According to him, there will be a very limited number of interesting orders that Czech suppliers could obtain: “Expansion will pose the risk of limiting the production volumes of traditional European manufacturers, on which our suppliers are primarily dependent.”
While European manufacturers have dominated in the constructionally much more complex internal combustion engines in recent decades, Asian companies have excelled in the global production of electronics. And since the production of an electric car is significantly simpler than a conventional car, and the differences between the cars will be determined much more by software and connectivity than driving characteristics, it is not surprising that Asia has become a more than capable rival of other manufacturers. In addition, unlike Europe, Asian automakers have closer ties to battery producers.
The top ten companies with the largest global market share last year included six Chinese companies, including the dominant CATL, three South Korean companies – LG, SK On, Samsung – and Japan’s Panasonic. Asia, unlike Europe, benefits from numerous deposits of raw materials needed for the production of batteries, in addition, Chinese manufacturers have been intensively deepening ties to mining in Africa and South America in recent years.
Although China has significantly reduced its massive and long-standing state support for electromobility, which has resulted in a significant drop in sales of electric cars there, Beijing has given domestic automakers more than a good chance to dominate markets on the old continent.
European automakers, on the other hand, sharply criticize the EU’s “failure to help”. According to them, the member states are mostly lagging behind in building a network of public charging stations and, through their representatives in the European Commission, which proposed the tough Euro 7 emission standard, they are also threatening the production of smaller cars and risking the loss of jobs. For example, if the Euro 7 standard were introduced in its current form, Škoda Auto would have to stop production of the Fabia, Scala and Kamiq models and lay off three thousand employees, as board member Martin Jahn told Czech Television.
For example, Carlos Tavares, head of the Stellantis concern, which includes the brands Citroën, Opel and Peugeot, is calling for the protection of European industry. He urges the introduction of tariffs on the import of Chinese electric cars into Europe, taking into account the fact that the sale of Western cars in China is subject to much stricter legislation. However, according to the Association of the Automotive Industry, such a solution would probably provoke retaliation on the Chinese market, which would ultimately be disadvantageous for Europe.
A different solution is proposed by the Czech Association of Industry and Transport. “The best way to protect our own market is competitive European electric cars. This means cars manufactured in Europe with low energy costs in fully robotized production halls, electric cars that will be comparable in price to the Asian competition and will have at least the same, or rather even better, technology and utility features,” believes the vice president of the union, Radek Špicar.
