Chinese carmakers target more European sales with five-star EVs
21/11/2022 24:00
By Nick Carey
SOLIHULL, England, Nov 21 (Reuters) - Chinese electric
vehicle (EV) makers have set their sights on winning over
European drivers and large corporate customers with more
affordable cars that come with top safety ratings and lots of
high-tech features.
In the last few months, several Chinese EVs have received
five-star European New Car Assessment Programme (NCAP) ratings -
an achievement that requires loading vehicles with active and
passive safety features that go well beyond legal requirements.
More are coming.
"All Chinese EV makers want to achieve Euro NCAP five-star
ratings in order to be more competitive in the European market,"
said Brian Gu, president of Chinese EV maker Xpeng 9868.HK .
Gu said Xpeng has spent the last three years building stores
and service centres in Denmark, the Netherlands, Norway and
Sweden - with some initial sales in Norway - before an official
launch next year of its electric P7 sedan and G9 sports-utility
vehicle (SUV) in the four countries.
Chinese EV makers have recognised that safety plays an
incredibly important part of the sales process, said Matthew
Avery, director at Thatcham Research, a British car research
centre funded by insurers and a Euro NCAP board member.
Five-star Euro NCAP ratings are seen as key to overcoming
residual European concerns over the quality of Chinese-made
cars, after awful crash test failures in 2006 and 2007 created
an impression that cars from China were unsafe.
Perhaps more importantly for sales, high safety ratings also
open up the potentially huge corporate car fleet market for
Chinese EV makers.
Fleet sales make up about half of all car sales in major
markets including Germany, France and the United Kingdom, and
many corporate buyers put a premium on safety.
"Fleet sales are very important and a lot of fleets have a
mandatory five-star rating for buying cars," Avery said.
CAR RENTAL COMPANIES
What's more, many fleets want to switch to EVs fast to meet
sustainability goals. But corporate fleets have struggled to get
enough EVs in Europe as supply chain issues have pushed waiting
times for some models to more than 12 months.
High demand for electric cars amid supply chain shortages
has allowed European carmakers to raise EV prices and focus more
on retail clients, rather than customers such as car rental
firms that have traditionally been less profitable for them.
That has created a window of opportunity for Chinese EV
makers that have already stolen a march on most foreign rivals
in China, by far the world's biggest market for EVs.
In October, for instance, German car rental company Sixt
SIXG.DE said it would buy about 100,000 EVs from BYD
002594.SZ , starting with its Atto 3 SUV which received the
coveted Euro NCAP five-star rating the same month.
China's Great Wall Motors (GWM) 601633.SS received
five-star ratings in September for its WEY brand Coffee 01
hybrid SUV and its ORA brand Funky Cat electric sedan.
European carmakers are also pursuing five-star ratings for
their EVs and hybrids, from BMW's BMWG.DE iX to Volkswagen's
VOWG_p.DE ID.4 and ID.5. In October, Mercedes MBGn.DE got
the top rating for its EQE sedan and its driver-assistance
features received the highest marks to date from Euro NCAP.
Chinese EV maker Aiways has yet to put its U6 electric
crossover through its NCAP paces but it too is shooting for the
highest rating on offer, said Alexander Klose, who heads the
carmaker's operations outside China.
He said Aiways has invested in extra safety features for the
U6 to open up opportunities for sales to European fleets,
including rental car firms, when it goes on sale next year.
"There will be a natural demand for vehicles like ours that
are fully equipped and come at very competitive prices," he
said, adding that Aiways hopes to sell 30,000 EVs in Europe in
2023, up from about 5,000 this year.
BASIC REQUIREMENT
French auto consultancy Inovev said about 155,000
Chinese-made cars were sold in Europe in the first nine months
of 2022, or 1.4% of the market. Chinese firms are on track to
hit 150,000 cars this year, nearly double the 80,000 sold in
2021.
But almost half the Chinese cars sold were EVs,
according to Inovev, giving them a 5.8% share of Europe's
fully-electric vehicle market.
Inovev vice-president Jamel Taganza said all Chinese cars
sold in Europe would be EVs within a few years, with more
lower-cost models on the way.
By 2030, Inovev estimates EVs will make up 40% of Europe's
new car sales and that Chinese brands will represent between
12.5% to 20% of that fully-electric market, with sales of
between 725,000 and 1.16 million vehicles.
"This is a conservative forecast," Taganza said. "But it
could increase more rapidly, especially if European carmakers do
not answer the needs in Europe of affordable EVs."
Getting a five-star rating is expensive for automakers
because it means investing in additional safety features from
extra airbags to collision avoidance, driver-assistance and
driver-monitoring systems.
Thatcham's Avery said Chinese EV makers have actively
engaged with Euro NCAP and were eagerly making the investments
necessary to land top ratings.
"Forget what you might think that Chinese means lower
quality or lower 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
should have top safety ratings, said Michael Shu, managing
director of BYD Europe.
"We think a five-star rating should be a very basic
requirement," he said.
'LEVERAGING THAT ADVANTAGE'
Great Wall Motor's ORA Funky Cat, meanwhile, will launch in
Britain, Germany, Ireland and Sweden later this year.
Starting around 32,000 pounds ($36,330) in Britain, or about
5,000 pounds cheaper than VW's ID.3, the Funky Cat's features
include facial recognition to store seating preferences,
driver-assistance systems, reverse camera and wireless phone
charging.
Toby Marshall, UK sales and marketing director for GWM's ORA
brand, said if a car is well made, laden with features, has a
high safety rating and is competitively priced, it no longer
matters where it was built.
"Those are the key ingredients that matter to car buyers,"
Marshall said, while showing off the Funky Cat at his office in
Solihull in England's midlands.
Bill Russo, head of consultancy Automobility Ltd in
Shanghai, said the problem for many international carmakers
with was that they ceded the advantage to Chinese rivals when it
comes to building lower-cost EVs.
"The one place on the planet you'll find an affordable EV
today is China," said Russo. "And they're leveraging that
advantage."
($1 = 0.8808 pounds)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FOCUS-Chasing green goals, corporations push car fleet managers
toward EVs urn:newsml:reuters.com:*:nL1N2YW0SU
Sixt agrees to purchase around 100,000 e-vehicles from China's
BYD urn:newsml:reuters.com:*:nL8N3151ER
China's BYD wins five-star European safety rating for electric
SUV urn:newsml:reuters.com:*:nL1N31D0OO
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additional reporting by Zoey Zhang in Shanghai and Giulio
Piovaccari in Milan; Editing by David Clarke)
((nick.carey@thomsonreuters.com; +44 7385 414 954;))