China started to produce electric cars and at first it was a bit difficult, but the new Chinese models are competing head to head with the American Tesla and the Scandinavian. Polestar and for the first time they are the big stars of the biggest motor show in Europe, traditionally held in Frankfurt and since last year held in Munich.
The famous European car event with permission from Paris opens its doors this Tuesday and it closes on Sunday and although it is now called “event” (it must change with social changes and environment) the car continues to become a big star, especially all. electric car, in a year in which sales recovered (12 consecutive months of increased registration in Europe) after the destruction of the pandemic. Sales are up but approximately 20% below 2019 levels and new orders in recent months have been smaller than registrations.
The big European brands will present their new electric models (less and less combustion), like the new electric Minis from the BMW group, but the big stars are the Chinese models. Companies like BYD will share the stage on an equal footing with the Volkswagen group in the heart of Munich, something that was unthinkable a few years ago.
The impact of the many arrivals of Chinese models is also the first European brand of electric models, the American Tesla of Elon Musk, who had to lower prices in front of the competition and changed the successful ‘Model 3’ to update it.. Some Chinese models are starting to achieve big sales, such as SAIC Motor’s MG4.
Protective measures
Governments are looking for measures to protect one of Europe’s most important industrial sectors in terms of wealth creation, innovation and jobs. One idea, being studied in Berlin and Paris, is for the European Union to implement an environmental categorization for all cars sold in Europe that would enable those made in The continent will receive the benefits of the environmental tax because by not bringing Europe they are cleaner in the environment.
The European high-end car brands see this as an idea because they know that other markets will respond to similar measures and that will harm the export of cars outside of Europe. BMW, Audi, Mercedes-Benz, Porsche or the famous Italian luxury brands (Ferrari, Lamborghini or Maserati).
Some Europeans are looking to cooperate with Chinese producers rather than compete. BMW and the Chinese ‘Great Wall’ are in Frankfurt in their joint work on the development of a new, smaller and lighter chassis for the new electric Mini Cooper S, which will be made in China.
In addition to the change represented by the entry of Chinese producers into the European market, they achieved another change that brought them to compete with Europeans not only in price but also in innovations. To the point that it is now European producers who are looking for technology transfers from their Chinese competitors, and not the other way around, as has been the case for decades. And they have to pay them.
Volkswagen spent $700 million in July for 5% of Chinese brand XPeng, valuing it at $14 billion. Why would the big German automaker want to invest there? To have access to the new and very powerful supercalculator created by XPeng, more advanced than the one managed by the German company. In just a few years, Chinese brands have gone from being laughed at by Europeans because they copied the design of European cars that have become things that European car manufacturers want.
