German automakers are facing their worst crisis as Chinese EV makers continue to expand overseas, putting pressure on Europe’s electrification efforts. According to Brian Gu, CEO of Xpeng, German manufacturers have shown determination to catch up and overcome the crisis they are in.
The European automotive industry is accelerating electric vehicle production through partnerships and investments. According to auto consultancy Inovev, Chinese brands accounted for 8% of new EV sales in Europe in 2023, up from 6% last year and 4% in 2021. China currently leads in global EV sales, with the US leading the way fastest growth recorded Germany in third place.
Startups like Xpeng still need the support of German manufacturers in terms of scale, branding and investment to cut costs and survive in a competitive market. Chinese companies like Xpeng, BYD and Leapmotor are entering foreign markets, offering cheaper models that challenge European companies on their own soil.
In 2024, Xpeng plans to expand into more European markets including Germany, UK and France. Chancellor Olaf Scholz believes foreign competition in the electric vehicle market should be a motivator rather than a problem for German manufacturers.
In order to increase sales, obstacles such as stereotypes about Chinese manufacturing, import costs and an underdeveloped electric vehicle market must be overcome. Cooperation between German and Chinese companies is crucial as they can complement each other by leveraging their different strengths.
The presence of Chinese companies at the German IAA Motor Show has increased, and the IAA hosts the World Congress of New Energy Vehicles, the largest electric vehicle conference in China. Chinese company executives expressed their admiration for the technologies proposed by European automakers and stressed the need for China to improve its core technology capabilities.
In summary, German automakers are determined to weather the current crisis, while Chinese EV makers continue to seek opportunities in overseas markets. Collaboration and innovation are essential for both parties to thrive in the evolving electric vehicle industry.