The sole obstacle to the sale of EVs is their price, Tesla CEO Elon Musk says. In China, companies such as BYD are preparing to resolve the obstacle globally. Last week at Shanghai Auto Show, China’s biggest electric vehicle producer introduced a new car, the Seagull, stunning analysts and competitors with its specifications: battery range of more than 300 km (186 miles) and a base price of a few thousand dollars less than most electric vehicles currently in European markets.
In spite of economic unpredictability and escalating competition, Tesla reduced prices in the United States last week for the sixth time since the year began. Due to Tesla’s price reductions, other car manufacturers, particularly those in China, have followed suit.
The Shanghai expo and the Seagull, however, draw attention to a similar dynamic: China’s car producers are currently setting the global standard for producing electric vehicles that ably compete on price and technology for the typical consumer. According to analysts and executives, more and more such vehicles from BYD and its competitors will be exported to Europe and Southeast Asia, as well as other foreign markets, endangering existing automobile manufacturers.
According to Patrick Koller, CEO of France’s leading auto manufacturer, Faurecia, the European market for entry-level electric vehicles has been opened up to automakers from China. Koller predicts that China’s carmakers will be able to sell a million units each year in the European Union, equivalent to 8% of total sales last year, thanks to their “considerable competitiveness advantage.”
Nio, which is competing with the likes of BMWG.DE for high-end electric cars on the Chinese market, announced last week that it was examining the American market as well as launching a new and more reasonably priced electric vehicle brand with Europe as its initial targeted market.
By the year 2026, Zeekr, a high-end electric vehicle brand owned by China-based Geely, intends to be present in the majority of markets in Europe.
By exporting from China, other well-known auto manufacturers are utilizing the competitiveness of the supply network in China. For instance, the BMW IX3 is exported from China to Europe and Southeast Asia. The Spring electric vehicle, an entry-stage hatchback similar to the BYD Seagull, is shipped by Renault SA (RENA.PA) Dacia to the European market and positioned as the second most dominant electric vehicle exporter from China in 2022, behind Tesla, which came in first.
However, the largest increase in exports has come from China’s car manufacturers. From 2020 through 2022, China’s exports of cars increased by four times to reach 2 million vehicles. If the rate from the first quarter continues, car exports of all varieties will surpass 3 million this year.
As the international market for EVs becomes more competitive, startups such as Atlis Motor Vehicles Inc. (NASDAQ: AMV) need to gear up for this stiff competition for the motoring public.
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