China’s Spree EV startup grabbing stake from legacy automakers

China’s EV startups have placed a combined emphasis on digital services, in-vehicle connectivity and customer-service experience alongside their electrification efforts, helping to shift the notion of EVs to one of compliance and regulation Where you use the best technology. , and get well treated in the process.

They are not alone, of course. Other dynamic auto companies are adopting a similar strategy, and the share of startup sales is still relatively low compared to the likes. Tesla and BYD, which sold 255,000 and 354,000 plug-in vehicles, respectively, globally last quarter. But the startup number is still important. They are growing rapidly and will probably top 250,000 in a quarter of next year.

Squeezed out of all this are established global automakers, many of which have deliberately slowed down their EV programs and are now scrambling to catch up with regards to their model lineups and battery supply. As recently as 2020, international automakers accounted for 61 percent of the total auto market in China. It has come down to 49 per cent in 2022 so far. The setbacks over software and disputes with local partners aren’t helping, and with China’s EV sales booming, it’s getting harder to see this market share trend reverse.

While Western automakers are seeing their share of the Chinese market shrink, EV startups from China are expanding rapidly in Europe. SAIC-owned MG Motor sold 40,000 EVs in Europe last year, while groups like Nio, Xpeng, BYD and others are testing the waters in countries like Norway with smaller numbers.

All the startup automakers in China are planning to significantly increase their international presence over the next few years and some of them are launching very cost-competitive EV models to pursue that goal. Europe still has a window open for them, as the region’s vehicle CO2 regulations do not tighten again until 2025. Several established automakers have accordingly slowed down their EV rollouts. With Tesla, BYD and all these EV startups, this may not be a wise strategy.

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Perhaps there are still some obstacles in the way ahead. Building a car is still difficult. But it is remarkable how rapidly the perception of what is possible can change. In 2019, China proposed what was widely seen as a broad target of new-energy vehicles representing 25 percent of new-energy vehicle sales by 2025. That number now looks like it will be achieved this year, which will be three years ahead of schedule. Chinese EV startups have played a key role in doing this.