Four years ago, only 3% of electric cars sold in Europe were made in China. Last year, that percentage shot up to 21.7%. That is, one in every five electric vehicles that reach European roads has been assembled in the Asian giant. And, of that figure, 7.3% are models from Chinese manufacturers because the rest are cars from multinationals from other countries, whether from Europe or the United States – such as the giant Tesla – that decided to manufacture in the Asian giant not only because It is one of the largest markets in the world. Also, because their production costs have benefited them.
Now that reality is changing and Western automobile industries have begun to tremble due to the strength of local manufacturers in that Asian country. On the one hand, because they see that many consumers, when they have to buy an electric car, prefer Chinese cars for the simple fact that they are cheaper. On the other hand, because the multinationals do not have the numbers and they are beginning to have financial problems in the face of growing Chinese competition. Just look at what has happened with Volkswagen, which is considering closing factories in Germany and laying off part of the workforce, something unprecedented until now and which could lead to an economic and political earthquake.
Faced with this situation, both the European Commission and the Biden Administration have chosen to open doors to the field and launch a series of tariffs on electric cars ‘made in China’. They believe that they have received state aid that results in unfair competition. The United States goes further and will ban imports of Chinese software in connected vehicles, because they can facilitate espionage. But who are those manufacturers that are moving the foundations of industrial giants with decades of history behind them?
The list of large Chinese manufacturers is extensive, but there are names that stand out above the rest and most are better known for their brands, which are beginning to gain a foothold in the Western market. Some of them have also bought local flags to facilitate their disembarkation. Among all, companies such as BYD, Geely, Chery or SAIC stand out. In addition, several of these companies are setting up factories in Europe, sometimes with local partners, which will allow them to avoid tariff policy.
The largest electric manufacturer above Tesla
Tesla is often named as the reference brand when it comes to electric cars. In fact, for a year now the largest manufacturer in the world has been BYD. For the Chinese company, last year was key because its sales and results skyrocketed. The former grew by more than 60% worldwide, reaching more than three million cars, although that number includes not only electric cars, but also plug-in hybrids. This allowed it to double its profit, up to 30 billion yuan, almost 3.9 billion euros.
This week, it has also become the largest electric car company in revenue. The Asian giant had a turnover of the equivalent of 26 billion euros between June and September, while the company founded by Elon Musk stood at 23.2 billion euros.
Behind this takeoff are, above all, their prices. For example, its best-selling model in Spain is the BYD ATTO 3, an electric urban all-terrain vehicle (SUV) that, if the aid from the Moves Plan is included, is sold for 26,490 euros. Of this model, 742 units have been sold between January and September. There are not many and they are far from the 7,187 Tesla Model 3 that lead the market, but they are 400% more than in the same period of 2023.
The company also has a history of improvement and of having been born practically from nothing. Its founder, Wang Chuanfu, started a battery company in the 1990s and is said to have had to take out a loan of the equivalent of $350,000 to do so. A few years later, he saw the opportunity to accelerate the business by betting on affordable electric cars and from there, to success. Among its shareholders is not only its founder, but also investment giants such as Blackrock or Berkshire Hathaway, Warren Buffett’s investment arm.
Geely and BAIC, ties with Renault and Mercedes
One of the Chinese manufacturers that has a catalog of well-known brands is Geely. For example, he is the owner of Lynk & Co, which is halfway between a traditional manufacturer and a car-sharing business proposition. Also, from Polestar, which is marketed as a high-end electric vehicle with a Nordic design. And he is a shareholder in one of the most renowned Swedish brands, Volvo.
In fact, Geely has been able to establish a network of alliances with European manufacturers. It is a partner of the French group Renault, although not for electric cars, but for combustion and hybrid cars. Together they formed a joint company, called Horse Powertrain, which is based in London. The Saudi oil company Aramco also participates in it, with 10% of the capital.
This strategy of share agreements also reaches high-end manufacturers. Li Shufu, president and main shareholder of Geely, also owns 9.7% of Mercedes Benz through the company Tenaciou3 Prospect Investment Limited, which is based in Hong Kong. A capital of German origin that it shares with the Chinese state company Beijing Automotive Group (BAIC), which owns 10% of the capital of the star’s German company.
SAIC, ally of Volkswagen and owner of MG
That European brands reach agreements with Chinese manufacturers is also not new. Volkswagen, for example, has been allied with SAIC, the acronym for Shanghai Automotive Industry Corporation, for decades. Together they have been manufacturing combustion cars in the Asian country for years and, given the rise of electric vehicles, they are considering closing some of their factories in that country.
SAIC is behind some of the best-selling brands in Spain, MG. In fact, it claims that it is the seventh largest car manufacturer in the world. Its top official, Wang Xiaoqiu, was one of the managers with whom the President of the Government Pedro Sánchez met on his recent official trip to the Asian giant. As a backdrop to this meeting is the decision, still pending, to launch a car factory in Europe, again, to avoid new tariff requirements.
One of its models, the MG MG4, has been among the best sellers in Spain for months. So far this year, it is only surpassed by the Tesla Model 3 and Model Y. In total, 2,022 units of that Chinese car have been registered this year, more than 5% of all electric cars that have been sold in Spain so far in 2024.
And there are more alliances. Stellantis, owner of brands such as Fiat, Peugeot, Citroën, Opel and Chrysler, controls 20% of the capital of the Chinese company Leapmotor, which allows it to manufacture and sell that brand’s cars outside the Asian country. Among the markets where they are sold is Spain.
Chery will manufacture at the former Nissan plant in Barcelona
Some companies have already reached agreements to manufacture in the Spanish market. This is the case of Chery. A few months ago, the Catalan group EV Motors, parent of the Ebro brand, closed an alliance with this Chinese giant to recover the old Nissan factory in the Barcelona Free Trade Zone.
Initially, the facility will be used to assemble Ebro models, which a few weeks ago went public to raise financing. In that jump to the trading floor, its president Rafael Ruiz confirmed that Chery cars, those of its Omoda brand, will not begin to be manufactured in the Free Zone until the end of 2025.
In addition to the previous manufacturers, there are more Chinese capital groups, such as Nio, Xpeng or Great Wall Motor. And there are brands that a priori have nothing to do with the automobile industry, such as the giants Huawei and Xiaomi, best known for their phones, but which have also launched themselves into designing and marketing electric cars.
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