Pioneering the EV Era: Chinas bold New Moves

Welcome to China EV Pulse,

Thank you for tuning in to the latest edition of our newsletter! In this issue, we explore the latest developments shaping China’s dynamic EV market and its impact on the global stage.

We begin with a look at Mercedes-Benz's bold strategy to introduce new electric models tailored for the Chinese market, reflecting the growing significance of China in the global EV landscape. We also cover the recent suspension of 215,000 tons of CO2 certificates due to ongoing investigations, highlighting regulatory challenges within the industry.

Chinese automakers continue to achieve remarkable growth in EV sales, while BYD takes direct control of its sales operations in Germany to strengthen its presence in Europe. Changan, too, is expanding its EV footprint, making its entry into the German market.

In another significant move, MG is set to launch an EV with a solid-state battery by 2025, signaling innovation and future technology trends. Meanwhile, VW and Xpeng are collaborating to develop new EV models specifically for China, further deepening their partnership.

We also explore how China is testing the use of EVs as power grid stabilizers in Jiangsu, showcasing innovative approaches to sustainable energy solutions. Finally, we look at Didi's ambitious plan to launch a fleet of 100,000 EVs in Mexico by 2030, highlighting China's growing influence in global EV markets.

Stay with us as we navigate these exciting developments in China’s ever-evolving electric vehicle sector.

Happy reading!

New Electric Models: Mercedes-Benz Bets Big on China

Mercedes-Benz has announced a significant investment of over 14 billion Yuan (approximately €1.8 billion) to expand its electric vehicle lineup in China. Starting in 2025, the company plans to produce several new electric models exclusively for the Chinese market, including an all-electric CLA long version, a GLE SUV, and a luxury van based on the VAN.EA platform.

The investment will be allocated with over 10 billion Yuan (€1.3 billion) dedicated to passenger car production, while more than 4 billion Yuan (€500 million) will support the development of light commercial vehicles. These models will be manufactured in Mercedes-Benzs existing joint ventures, Beijing Benz and Fujian Benz. Beijing Benz is set to begin production on the new Mercedes-Benz Modular Architecture (MMA) platform next year, with the first model being the all-electric CLA long version.

A significant focus of this investment is the development of a new GLE SUV exclusively for China. The locally produced version will be the first model developed by Mercedes’ Chinese R&D team, aiming to enhance rear-seat comfort and integrate intelligent technologies tailored to Chinese customers. The GLE has been Mercedes’ best-selling imported car in China, and the new version will further strengthen its position in the local market.

Mercedes-Benz is also targeting the light commercial vehicle sector, supporting Fujian Benz in producing a new luxury electric van on the VAN.EA platform. This investment aligns with the company's strategy to expand its footprint in China’s growing electric vehicle market, building on its history of local production that began in 2010 with the E-Class long version and now includes eleven locally produced models.

This move by Mercedes-Benz reflects a broader trend among German automakers increasing their commitment to the Chinese market. Volkswagen and BMW are also ramping up investments to expand their electric vehicle production capabilities in China, underscoring the country’s pivotal role in the global shift towards e-mobility.

Investigations Halt 215,000 Tons of CO2 Certificates in China

The German Environment Agency (UBA) has successfully blocked the issuance of new certificates for eight Upstream Emission Reduction (UER) projects in China, preventing about 215,000 tons of CO2 from entering the market. The UBA uncovered significant irregularities in these projects, which are meant to reduce emissions before crude oil processing. Seven of the eight projects saw their 2023 certification requests withdrawn after being confronted with serious discrepancies.

The UBA's approach included a combination of its own investigations and support from an international law firm, which conducted on-site examinations in China. As a result, UBA ensured that no unjustified UER certificates could be issued for these projects. The agency is expanding its focus to include 13 additional UER projects, enforcing stricter controls and on-site inspections to prevent future fraud.

Parallel to these efforts, Berlin prosecutors are investigating 17 individuals on suspicion of commercial fraud involving UER project verifications. The investigation comes amid suspicions that some of the project operators misled the UBA regarding the existence or eligibility of several climate protection projects.

Given these findings, UBA is committed to further intensifying its scrutiny of global UER projects to ensure only legitimate certificates reach the market, maintaining strict compliance with emissions reduction standards.

Chinese Automakers Achieve New Heights in EV Sales

Chinese electric vehicle manufacturers are continuing to show robust sales growth, with several brands setting new records or maintaining strong performance in August 2024.

BYD, a major player in the Chinese EV market, achieved a new sales record in August with 373,083 electrified vehicles (including plug-in hybrids and battery electric vehicles), surpassing its previous high of 342,383 units in July. This represents a year-on-year increase of 35.97% and a month-on-month growth of 8.97%. Since March 2022, BYD has ceased the production and sales of conventional combustion engine vehicles, focusing solely on plug-in hybrids and battery electric models. In August, the company sold 148,470 battery electric vehicles, marking a 1.95% increase from the previous year and a 14.21% rise from July.

Li Auto, headquartered in Beijing, delivered 48,122 vehicles in August, reflecting a 38% increase compared to the same period last year. For the third consecutive month, Li Auto has exceeded 47,000 units in deliveries, predominantly consisting of plug-in hybrid models. Despite the delay of its newest electric SUV model to 2025, the company aims to reach one million produced vehicles by the end of October.

Nio reported the delivery of 20,176 vehicles in August, the fourth consecutive month of exceeding the 20,000 mark. This represents a 4% increase from August 2023, though slightly down from the 20,498 units delivered in July. Year-to-date, Nio's deliveries total 128,100 vehicles, a notable 36% increase over the same period last year, demonstrating continued growth momentum.

XPeng also recorded strong sales in August, with 14,036 electric vehicles delivered—the company’s best month of the year and its sixth consecutive month of growth. Although the year began slower than expected, with fewer deliveries compared to late 2023, XPeng remains optimistic. The introduction of new models and expansion into new markets is expected to help the company reach its target of surpassing 20,000 units sold in the coming months.

Zeekr, another Chinese EV manufacturer, delivered 18,015 vehicles in August, a 15% increase from July’s 15,655 units and a substantial 46% rise compared to August 2023. This represents the third-highest monthly sales in the company’s history. From January to August 2024, Zeekr achieved 121,540 deliveries, an 81% growth over the same period last year. However, the company's target of selling 230,000 vehicles in 2024 appears challenging to reach without a significant uptick in sales, despite a range of models including the Zeekr 001, Zeekr 007, Zeekr 009, and Zeekr X, with most sales concentrated on the Zeekr 007.

These figures underline the dynamic and competitive landscape of the Chinese electric vehicle market, as manufacturers strive to increase their market share both domestically and internationally.

Headline Roundup

💡 BYD Takes Direct Control of German Sales Operations (EAN)

• BYD has agreed to acquire Hedin Electric Mobility GmbH, its former importer in Germany, including two BYD Pioneer Stores in Stuttgart and Frankfurt, to directly manage its sales operations in the country.

• Hedin Automotive eMobility GmbH will continue as an authorized BYD dealer in Germany, maintaining its locations in Mannheim, Kaiserslautern, and Saarbrücken.

• Despite disappointing sales figures in 2023, BYD aims to strengthen its market presence in Germany and Western Europe through this acquisition and recent leadership changes.

• The acquisition is subject to regulatory approvals and expected to be completed in Q4 2024.

💡 Changan Enters Germany to Expand EV Presence in Europe (EAN)

• Changan Automobile has established a German subsidiary, Changan Automobile Deutschland GmbH, in Munich to enter the German market with its electric vehicles (EVs).

• The new unit will focus on sales, marketing, service, market research, technical compliance, and local product development, targeting a substantial presence in Europe.

• Changan plans to sell 750,000 new energy vehicles (NEVs) globally in 2024, with expansion plans including production sites in Europe, South America, and Thailand.

💡 MG to Launch EV with Solid-State Battery by 2025 (EAN)

• MG Motor, a brand under Chinese automaker SAIC, plans to launch an electric vehicle with a solid-state battery in China by Q2 2025, potentially becoming the first commercially available EV with this technology.

• Solid-state batteries are lighter, more compact, safer, and longer-lasting than current vehicle batteries but remain expensive due to limited scalability in production.

• The first MG model to feature this technology may be the high-end Cyber GTS, with expectations of a broader adoption of solid-state batteries in China around 2030.

💡 VW and Xpeng Partner to Develop New EVs for China (EAN)

• Volkswagen and Xpeng are collaborating to develop two new models for the Chinese market, likely based on the Xpeng G9 platform, to modernize VW's offerings in China.

• Several hundred VW employees have recently been working in Xpeng’s offices in China, highlighting the depth of the partnership.

• The collaboration aims to leverage VW's automotive experience and Xpeng's expertise in smart EVs, potentially enhancing both companies' market reach.

• Xpeng, already present in Germany with its P7 sedan, G9 SUV, and the new G6 compact SUV, continues to expand its global footprint.

💡 China Tests EVs as Power Grid Stabilizers in Jiangsu (EAN)

• China has launched a Vehicle-to-Grid (V2G) pilot project in Jiangsu province, involving 1277 electric vehicles (EVs) to help stabilize the power grid.

• The V2G system allows EVs to charge during low-demand periods and discharge energy back to the grid during peak times, providing grid stability and financial incentives for EV owners.

• The project has shown promising results, releasing a load of 12,000 kilowatts and reducing peak demand by 17,000 kilowatt-hours, enough to power around 2,100 households for a day.

• With the number of EVs in Jiangsu expected to exceed 10 million by 2030, V2G could become a key technology in supporting grid stability and the energy transition.

💡 Didi to Launch 100,000 EV Fleet in Mexico by 2030 (electrive)

• Didi plans to introduce 100,000 electric vehicles (EVs) to Mexico by 2030, investing $50.3 million to build the largest EV fleet in Mexico and Latin America.

• The EVs will be exclusively used for Didi's app-based transport service, not sold to private or corporate customers.

• Didi collaborates with several Chinese automakers, including BYD, GAC Aion, and Xpeng, for the development and deployment of EV models optimized for ride-hailing.

• The move is based on Didi’s success with EVs in China, where 57% of its ride-hailing kilometers are covered by electric cars, proving cost-effective and environmentally friendly.

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Sebastian & team | China EV Pulse

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