KazPost

Kazakhstan News
Thursday, May 23, 2024

The race for China's electric SUV market is heating up both at home and abroad.

The race for China's electric SUV market is heating up both at home and abroad.

The battleground in the electric vehicle price war is shifting to SUV-styled EVs, the largest section of the market dominated by Tesla and BYD.
The market, already congested with more than 90 models, is likely to grow even tighter, analysts and executives said, with at least 20 new models of both Chinese and foreign brands launching in April, compressing pricing and margins at home and pushing exports.

Analysts believe that EV manufactures in China have followed Tesla's aggressive price reduction by decreasing costs for their own electric SUVs, cannibalizing sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows.

With increased exports of Chinese-made electric SUVs, the trend will spread globally.

"Because of China's ultra-competitive market, we'll see a lot of Chinese exports." Tu Le, founder of Beijing-based advice firm Sino Auto Insights, believes it will be a pressure release valve.

Over the last decade, the SUV market in China has grown to account for about 40% of all cars sold, with 400 SUV models available in all fuel types.

In 2022, nearly as many Chinese-made SUVs were sold as automobiles of any sort in Europe last year, or more than 11 million.

Since Tesla released its locally built Model Y in China two years ago, the popularity of electric SUVs has surged, making it one of the fastest-growing segments in the world's largest auto market.

Among the new models unveiled at the Shanghai Auto Show in April were both domestic and foreign names.

Volkswagen (VOWG_p.DE), BMW (BMWG.DE), and Toyota (7203.T) are banking on new electric SUVs to boost sales in China.

Xpeng (9868.HK) and Nio (9866.HK), both Made in China EV startups, have six SUV models, and EV-only brands developed by Chinese state-owned vehicle firms, such as GAC's (601238.SS) Aion, are also pushing all-electric SUVs.

They will compete with 93 existing electric SUV models in a market with 1.5 million sales in 2022, with the top 10 brands accounting for 84%, according to a Reuters analysis of statistics from the China Association of Automobile Manufacturers (CAAM).

Before Tesla began making Model Ys in China in 2020, there were 76 electric SUVs on the market, with annual sales averaging just 3,000 units.

Despite recent slight price increases, Tesla's Model Y is still 20% less expensive in China than it was in early October, when the carmaker was dealing with growing inventory.


DISCOUNT WAR
Xpeng, Leapmotor (9863.HK) and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off.

Those who refuse to cut prices on existing models in order to safeguard brand value have instead chosen to provide lower-than-expected beginning prices for new models, as well as longer driving ranges and more autonomous driving technologies.

For example, Geely's (0175.HK) (GEELY.UL) luxury EV brand Zeekr priced its new small crossover Zeekr X starting at $27,500, which is 28% less than Model Y and nearly the same price as Honda's (7267.T) CR-V, whose first-quarter sales fell 56%.

Mitsubishi Motors (7211.T) also said last week that production of its Outlander SUV in China would be halted for three months.

According to Le of Sino Auto Insights, the reality is "brutal" for heritage international companies pursuing the mass market with small SUVs priced under $40,000, such as Ford.

Jim Farley, CEO of Ford (F.N), acknowledged severe market competition for two-row, SUV-styled EVs as a factor fueling China's auto export surge.

"That's why they're focusing so heavily on Europe." Europe is a high-end export market. "They're all going there," Farley remarked after a trip to China in April.

According to Farley, Ford would also restructure its China business in order to make one of its joint ventures into an export hub for low-cost commercial electric and combustion vehicles.

General Motors (GM.N), which saw its China profit fall by about a fourth in the most recent quarter, needs new EVs to succeed in order to reclaim its market share in China, but the pressure is severe.

"China has 100 vehicle brands vying for sales and a 50% capacity utilization rate," stated CEO Mary Barra.

Tesla and Renault (RENA.PA) have already been exporting considerable quantities of China-made electric SUVs to Europe. According to Reuters, Tesla will begin exporting Model Y crossovers from its Shanghai plant to Canada, marking the company's first exports to North America.

Chinese automakers have their own ambitions to increase sales of electric SUVs in Europe.

Zeekr stated it would bring the Zeekr X to Western Europe, while BYD's Atto 3 SUV exports more than doubled in the first quarter as the company began taking orders there.

"The styling of it (Atto 3) is in keeping with the higher driving position, the good space," said Mark Blundell, BYD's marketing head in the United Kingdom.

"We just feel like it's a good starting point for us in the UK."

$1 equals 6.9000 Chinese yuan renminbi.
Newsletter

Related Articles

KazPost
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
An Ominous Shift in Warfare: Western Powers Risk War Crimes and Violate International Norms with Cluster Bomb Supply to Ukraine
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
Corruption in the European Parliament - Business as usual
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
Paris Suburb Grapples with Violence as Curfew Imposed: Saint-Denis Residents Express Dismay and Anger
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
×