Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

The race for China's electric SUV market is heating up both at home and abroad.

The race for China's electric SUV market is heating up both at home and abroad.

The battleground in the electric vehicle price war is shifting to SUV-styled EVs, the largest section of the market dominated by Tesla and BYD.
The market, already congested with more than 90 models, is likely to grow even tighter, analysts and executives said, with at least 20 new models of both Chinese and foreign brands launching in April, compressing pricing and margins at home and pushing exports.

Analysts believe that EV manufactures in China have followed Tesla's aggressive price reduction by decreasing costs for their own electric SUVs, cannibalizing sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows.

With increased exports of Chinese-made electric SUVs, the trend will spread globally.

"Because of China's ultra-competitive market, we'll see a lot of Chinese exports." Tu Le, founder of Beijing-based advice firm Sino Auto Insights, believes it will be a pressure release valve.

Over the last decade, the SUV market in China has grown to account for about 40% of all cars sold, with 400 SUV models available in all fuel types.

In 2022, nearly as many Chinese-made SUVs were sold as automobiles of any sort in Europe last year, or more than 11 million.

Since Tesla released its locally built Model Y in China two years ago, the popularity of electric SUVs has surged, making it one of the fastest-growing segments in the world's largest auto market.

Among the new models unveiled at the Shanghai Auto Show in April were both domestic and foreign names.

Volkswagen (VOWG_p.DE), BMW (BMWG.DE), and Toyota (7203.T) are banking on new electric SUVs to boost sales in China.

Xpeng (9868.HK) and Nio (9866.HK), both Made in China EV startups, have six SUV models, and EV-only brands developed by Chinese state-owned vehicle firms, such as GAC's (601238.SS) Aion, are also pushing all-electric SUVs.

They will compete with 93 existing electric SUV models in a market with 1.5 million sales in 2022, with the top 10 brands accounting for 84%, according to a Reuters analysis of statistics from the China Association of Automobile Manufacturers (CAAM).

Before Tesla began making Model Ys in China in 2020, there were 76 electric SUVs on the market, with annual sales averaging just 3,000 units.

Despite recent slight price increases, Tesla's Model Y is still 20% less expensive in China than it was in early October, when the carmaker was dealing with growing inventory.


DISCOUNT WAR
Xpeng, Leapmotor (9863.HK) and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off.

Those who refuse to cut prices on existing models in order to safeguard brand value have instead chosen to provide lower-than-expected beginning prices for new models, as well as longer driving ranges and more autonomous driving technologies.

For example, Geely's (0175.HK) (GEELY.UL) luxury EV brand Zeekr priced its new small crossover Zeekr X starting at $27,500, which is 28% less than Model Y and nearly the same price as Honda's (7267.T) CR-V, whose first-quarter sales fell 56%.

Mitsubishi Motors (7211.T) also said last week that production of its Outlander SUV in China would be halted for three months.

According to Le of Sino Auto Insights, the reality is "brutal" for heritage international companies pursuing the mass market with small SUVs priced under $40,000, such as Ford.

Jim Farley, CEO of Ford (F.N), acknowledged severe market competition for two-row, SUV-styled EVs as a factor fueling China's auto export surge.

"That's why they're focusing so heavily on Europe." Europe is a high-end export market. "They're all going there," Farley remarked after a trip to China in April.

According to Farley, Ford would also restructure its China business in order to make one of its joint ventures into an export hub for low-cost commercial electric and combustion vehicles.

General Motors (GM.N), which saw its China profit fall by about a fourth in the most recent quarter, needs new EVs to succeed in order to reclaim its market share in China, but the pressure is severe.

"China has 100 vehicle brands vying for sales and a 50% capacity utilization rate," stated CEO Mary Barra.

Tesla and Renault (RENA.PA) have already been exporting considerable quantities of China-made electric SUVs to Europe. According to Reuters, Tesla will begin exporting Model Y crossovers from its Shanghai plant to Canada, marking the company's first exports to North America.

Chinese automakers have their own ambitions to increase sales of electric SUVs in Europe.

Zeekr stated it would bring the Zeekr X to Western Europe, while BYD's Atto 3 SUV exports more than doubled in the first quarter as the company began taking orders there.

"The styling of it (Atto 3) is in keeping with the higher driving position, the good space," said Mark Blundell, BYD's marketing head in the United Kingdom.

"We just feel like it's a good starting point for us in the UK."

$1 equals 6.9000 Chinese yuan renminbi.
Newsletter

Related Articles

0:00
0:00
Close
Slovakian Prime Minister Robert Fico is in life-threatening condition after being shot multiple times
Xi Jinping Highlights Europe's Divisions Ahead of Putin Visit
German Court Rules AfD Can Be Monitored for Extremism
Xi Jinping Highlights Europe's Divisions Ahead of Putin Visit
UN General Assembly Approves Palestinian Membership Bid
Teens Forming Friendships with AI Chatbots
WhatsApp Rolls Out Major Redesign
Neuralink's First Brain Implant Experiences Issue
Apple Unveils New iPad Pro with M4 Chip, Misleading AI Claims
OpenAI to Announce Google Search Competitor
Apple Apologizes for Controversial iPad Pro Ad Featuring Instrument Destruction
Boeing 737 Catches Fire in Senegal, 10 Injured
Cruise Ship Arrives in NYC with Dead 44-Foot Whale on Bow
Trump lawyer questions Stormy Daniels' account of sex with Trump
Hunter Biden's Gun Charges Upheld, Trial Set for June
Last Indian soldiers leave Maldives
Espionage Scandal in Poland: Listening Devices Found Before Government Meeting
Apple Faces Significant Sales Decline Amid AI Integration Delay
Netanyahu's Firm Stance Amid Rafah Hostage Talks
New UK Laws: Banning Weak Passwords for Internet-Connected Devices to Enhance Cybersecurity
Spanish Prime Minister May Announce Resignation
New Study: Vaping May Lower Fertility in Women Trying to Get Pregnant
U.S. DOJ Seeks Three-Year Sentence for Binance Founder Changpeng Zhao
Orban: Destroy Liberal World Order - Predicts End This Year
Diplomatic Tensions: Sunak Clashes with Macron Over Rwanda Plan
A Jewish woman was kidnapped and raped in Gennevilliers (a suburb in western Paris), France, on the background of hatred for Israel
Russia: Deputy Defense Minister Arrested on Suspicion of Taking Bribes
Stanford Researchers Discover Child Abuse Material in AI Image Generator Dataset: Can Regulations Prevent Explicit Deepfakes of Children?
Record-Breaking 'Extreme Heat Stress' Days in Europe's Contrasting 2023 Summer: A Health Threat
Thousands Evacuated: 1,000-Kg NATO Bomb Removed from Serbian City
European Car Sales Drop 5.2% in March: Electric Vehicles Face Challenges Amidst Market Downturn and High Prices
Urgent Call from William Burns as Kyiv Braces for Russian Summer Offensive.
IMF Boosts Russia's 2024 Economic Growth Forecast to 3.2%
BOEING WHISTLEBLOWER: THE MAX AIRPLANE IS NOT SAFE!!!
Creative menu of a Pizza restaurant..
The communists couldn’t ban us and neither could the Brussels bureaucrats. The second day of the NatCon Talk conference is underway.
You can be a very successful player, but a player with character is another level!
Resumption of Controversial NatCon 2024 Conference in Brussels
The 60 Minutes journalists went to Sweden to show us the wonderful world of diversity and integration but they were threatened, beaten and chased away by diversity itself.
Experience the Future of Dining: My Visit to an AI-Powered Burger Joint
China's Economy Surges Ahead with 5.3% GDP Growth in Q1 2024, Boosted by High-Tech Manufacturing
Brussels Venue Cancels Right-Wing Conference: Free Speech Crisis as Concert Noble Drops NatCon Event
The West stands with Israel, Iran is furious: "Double standards and irresponsibility"
Here is a robot that can clean the river in Siem Reap.
Play stupid games, win stupid prizes
Hungarian PM Viktor Orbán: "We condemn last night's attack against Israel, and pray for the safety of the Israeli people."
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
I will never get enough of his videos and the pure joy and beauty of these women!!
Scientists at the University of Maryland have developed an "invisibility cloak", for AI using adversarial patterns on a sweater, making the wearer nearly undetectable to standard object detection methods.
×