How Chinese EVs Are Reshaping Global Markets

Welcome to the latest edition of the China EV Pulse Newsletter!

This week, we explore how Chinese automakers are driving Southeast Asia's mobility transition, dominating the region with innovative strategies and expanding influence.

In Europe, Chinese brands are making their mark as the Euro NCAP 2024 tests highlight their growing strength in safety and technology. Meanwhile, BYD continues to lead the EV market with a record-breaking surge in November sales, joined by strong performances from XPeng and Zeekr.

Looking ahead, BYD’s first European EV factory is set to open before 2025 tariffs take effect, solidifying its position in the competitive European market. Dive into these stories as we uncover how Chinese automakers are shaping the global EV landscape.

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How Chinese Automakers Dominate Southeast Asia’s Mobility Shift

Southeast Asia is becoming a strategic market for Chinese automakers, especially in New Energy Vehicles (NEVs). With nations like Indonesia, Thailand, Malaysia, and Vietnam driving demand for eco-friendly mobility through government incentives, Chinese brands are capitalizing on their leadership in electrification. Lily Zhou from Frost & Sullivan emphasized the region’s growing importance, noting that 57.7% of Chinese vehicle exports to Southeast Asia are NEVs, surpassing even Europe’s share in electric vehicle exports.

Key Factors Shaping Southeast Asia's EV Market

• Government Incentives:

  • Indonesia offers tax breaks of up to 20 years for EV production and reduced VAT for fully electric cars.

  • Thailand provides up to eight years of tax exemptions and per-unit subsidies for EVs.

• Localization of Production:

  • Brands like SAIC and Great Wall Motors are building assembly plants in Thailand and Indonesia, benefiting from reduced costs and local market access.

  • BYD is expanding its EV bus and taxi production in Thailand to meet regional demand.

• Market Leadership by Chinese Brands:

  • BYD leads with EV expertise, focusing on affordable models tailored to Southeast Asian consumers.

  • Geely leverages partnerships, such as with Proton in Malaysia, combining local assembly with Chinese innovation.

• Geopolitical and Economic Advantages:

  • ASEAN trade agreements and bilateral partnerships simplify cross-border trade and foster investment.

Opportunities and Challenges

The region’s rapid urbanization and increasing environmental awareness make it ripe for NEV adoption. However, local automakers face growing competition from Chinese brands, which use aggressive pricing and technological innovation to dominate. The demand for connected and intelligent vehicles is also set to grow, requiring continued investment in R&D and infrastructure.

For Chinese automakers, Southeast Asia offers not only a lucrative market but also a potential export hub for other global regions. Early investments and localized strategies position them as leaders in transforming the mobility landscape in this fast-growing region.

Implications for European Automakers

To compete, European manufacturers must:

• Invest in localized production and partnerships to reduce costs.

• Focus on affordable and sustainable models tailored to regional needs.

• Leverage their strengths in innovation and premium quality while adapting to Southeast Asian consumer preferences.

Euro NCAP 2024: EVs and Chinese Brands Shine in Tests

Euro NCAP has released its final safety ratings for 2024, evaluating 15 vehicles, including several highly anticipated EVs. Among the highlights is the Maxus eTerron 9, Europe’s first electric pick-up, which earned five stars for its strong pedestrian protection and less aggressive impact compared to traditional pick-ups. Compact models like the Renault 5 and Alpine A290 scored four stars, while SUVs such as the Volvo EX30 and the electric Porsche Macan received top ratings, reflecting advancements in safety technology.

Chinese automakers stood out, with the Deepal S07 and Leapmotor C10 achieving five stars, signaling their growing prominence in Europe. The Deepal S07 set a new record for adult occupant protection, while the Leapmotor C10 showcased the brand’s commitment to safety. Larger SUVs like the Hyundai Santa Fe and Mazda CX-80 also performed well, with the latter joining the five-star club. Audi’s new A5 continued its legacy of safety excellence with top scores, highlighting that even mid-range models prioritize advanced safety.

These results underscore the progress automakers have made in safety across all segments. From compact EVs to premium SUVs, manufacturers are setting new benchmarks in protecting drivers, passengers, and pedestrians, solidifying safety as a key factor in the evolving automotive market.

BYD Leads November EV Surge; XPeng and Zeekr Shine

November 2024 brought record-breaking sales for Chinese EV manufacturers, highlighting the rapid growth and competitiveness of the market. BYD led the charge with over 504,000 units sold, a 67% year-on-year increase, driven by strong demand for both BEVs and PHEVs. Leapmotor and Zeekr also posted impressive growth, with Leapmotor crossing 40,000 units for the first time and Zeekr hitting 27,011 units, up 106% year-on-year.

XPeng surpassed 30,000 sales in November, up 54% from last year, thanks to the success of the Mona M03 and P7+. Nio recorded 20,575 deliveries, including over 10,000 units from its new Onvo brand, representing a 29% year-on-year rise. Li Auto reported 48,740 deliveries, showing strong annual growth but a slight monthly decline, while Xiaomi solidified its market position with over 20,000 sales of its SU7 model.

The results underscore China’s dominance in the EV market and the growing competition among its manufacturers. With companies like BYD, Nio, and XPeng consistently achieving record sales, Chinese automakers are strengthening their positions domestically and eyeing global expansion.

BYD’s First European EV Factory to Beat 2025 Tariffs

BYD is advancing its European expansion by constructing its first factory in Szeged, Hungary, with production set to begin by late 2025, two years ahead of schedule. Initially, the plant will manufacture smaller EVs such as the Dolphin and Atto 3, with plans to later include the Atto 2 and Seagull, a subcompact city car designed specifically for the European market. Larger models like the Tang, Han, and Seal will continue to be imported from China. BYD's focus on producing compact EVs locally is aimed at mitigating the impact of EU tariffs on Chinese-made vehicles and addressing a gap in affordable small EVs left by European automakers.

The new factory, located near the Serbian border, is central to BYD’s strategy of establishing itself as a key player in Europe while avoiding the recently implemented EU import tariffs of up to 35%. The move highlights the growing trend among Chinese automakers to build vehicles directly in Europe, with BYD leading as the first Chinese automaker to establish a dedicated passenger car plant on the continent. Other brands are exploring similar strategies, including partnerships with European firms like Leapmotor and Stellantis.

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Sebastian & team | China EV Pulse

📸 _{Image Credits (in order of appearance): Zeekr - Holger Kleine / Shutterstock - Maxus - scotomania / Shutterstock - Karolis Kavolelis / Shutterstock}