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.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
×