Chinese Electric Vehicles Pose “Real Threat” to European Car Industry, Warns Financial Expert
Munich, Germany – In a startling revelation, Christian Kames, managing director at financial advisory firm Lazard, has stated that Chinese electric vehicles (EVs) are “a real threat” to the European car industry. Kames made the comments at the IAA Mobility Conference in Munich, where the number of Chinese companies has significantly increased compared to previous years.
According to IAA Mobility, around 40% of the presenters at the conference are from Asia, and the number of Chinese exhibitors has more than doubled from 29 in 2021 to 75 this year. With almost 750 exhibitors from 38 countries, the surge in Chinese companies illustrates their ambition to conquer the European market.
Kames emphasized that European auto manufacturers are aware of the competition posed by Chinese companies. “They get it now, that the Chinese [automakers] are a real threat. The question is, what do they do about it?” he said. However, Kames also stated that he believes the European car industry no longer underestimates the Chinese.
The growing presence of Chinese EV companies in Europe is further evidence of their intentions. Warren Buffett-backed carmaker BYD recently launched its Seal electric sedan for the European market, while Leapmotor, based in Hangzhou, China, announced that its SUV will be available in Europe next year. Xpeng, another major Chinese automaker, has plans to sell its cars in Germany in 2024 following its success in the Norwegian, Swedish, Danish, and Dutch markets.
The threat posed by China’s expanding EV market has prompted Swiss bank UBS to downgrade two major European automakers. However, some European carmakers are taking action to counter the Chinese competition. Renault CEO Luca De Meo stated that the company is increasing its investment in new technologies, particularly in its new EV-dedicated unit, Ampere. De Meo believes this will position the company well against international competitors.
The rise of Chinese companies in Europe’s EV market not only presents a challenge but also offers an opportunity for European countries to learn from Chinese advances. Chris Reitermann, CEO of Ogilvy Asia Pacific and Greater China, argues that multinational players in the industry have struggled because they underestimated the speed of the shift to electric vehicles. Reitermann suggests that partnerships between local EV companies and multinational companies may be the way forward.
As Chinese EVs continue to make significant strides in Europe, the European car industry must rally to protect its market share and develop innovative strategies to counter the competition. The battle has begun, and only time will tell which companies will emerge victorious in this fierce competition for dominance in the EV market.
CNBC’s Arjun Kharpal, Evelyn Cheng, and Elliot Smith contributed to this report.