From Paris to all over europe...

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

In this issue, we take a closer look at Guangzhou Automobile Group's (GAC) ambitious plans to introduce smart technology and cutting-edge design to the European EV market. A test drive of the GAC Aion V reveals its potential, though some performance aspects lag behind expectations. Additionally, we review the Hongqi EH7, where comfort and advanced tech features stand out.

We also examine the recent approval of EU tariffs on Chinese EVs, which won’t impact prices in 2024 but may pose long-term challenges to Chinese automakers’ growth in Europe. On the global front, Chinese manufacturers are quickly filling the void in the Russian car market post-war, strengthening their presence in the region.

Finally, Nio sets a new milestone with its battery swap stations, expanding its infrastructure to support further growth.

Happy reading!

Guangzhou Automobile Group (GAC) aims to bring Smart Tech and Design to european EV Market

• GAC plans to enter the European market with its Aion brand, focusing on quality and leveraging experience from partnerships with Honda, Toyota, and Stellantis.

• Design, led by international experts, is a core strategy for GAC’s European success.

• Regulatory challenges, especially for autonomous driving and homologation, are significant hurdles in Europe.

• GACs in-house ADiGO technology offer competitive advantages.

• GAC will first target non-EU markets like Norway and the UK, with potential European production in the future.

Chinese automaker Guangzhou Automobile Group (GAC) is preparing to launch its Aion brand in Europe, a market it sees as both challenging and full of potential. Fan Zhang, Vice President of GAC R&D, discussed the company’s strategic approach, emphasizing lessons learned from collaborations with established brands like Honda and Toyota. Zhang highlighted the critical importance of design, stating that GACs global design teams, especially the one in Milan, are key to winning over European consumers.

Entering Europe won't be easy, especially with stringent regulatory standards around safety and autonomous driving. Zhang acknowledged that while GAC has made significant strides in China with technologies like its ADiGO smart driving system, navigating Europe’s regulations will require patience and adaptation. The company is also working on advancing battery technologies, including 800-volt systems, but will initially rely on the proven 400-volt strategy due to Europes underdeveloped charging-infrastructure.

Looking ahead, GAC plans to introduce two additional models by 2025, targeting markets outside the EU, such as Norway and the UK, before scaling up within Europe. Although the company faces many challenges, Zhang is confident that GACs technology, quality, and design can compete with established European brands.

GAC Aion V Shows Promise for Europe, Lags in Performance

The GAC Aion V impresses with its well-equipped interior and advanced technology, including gesture controls and AI features, setting it apart from many competitors. Its smooth suspension and refined driving experience make it ideal for longer journeys. However, the motor performance feels modest compared to European rivals like the VW ID.4, which may not satisfy more demanding drivers.

While the Aion V excels in comfort and features, it faces tough competition in Europe. The regenerative braking and steering, tailored for the Chinese market, need further refinement for European standards. Overall, the electric SUV shows significant potential, but its success will depend on future optimizations and pricing, which GAC has yet to disclose.

Hongqi EH7 Test Drive Reveals Comfort and Tech Features

The Hongqi EHS7 and EH7 models were showcased at the Paris Auto Show, with both vehicles positioned as luxury entries into the European market. The EHS7, a premium SUV, and the EH7, a high-end sedan, aim to build on the success of the earlier E-HS9. The design of the EH7, overseen by former Rolls-Royce designer Giles Taylor, blends elements from luxury models like the Mercedes EQS and Tesla Model S, while maintaining its distinct visual identity with features like a striking rear light strip.

Inside the EH7, passengers enjoy a luxurious cabin with heated and massaging seats, ambient lighting, and a wide infotainment screen. However, a few hard plastic elements detract from the otherwise premium feel. The test car featured a 619-horsepower all-wheel drive, while the base version comes with 344 horsepower and an 85 kWh battery, offering up to 655 km of range. Despite the brief test drive, the car demonstrated smooth handling and a comfortable ride, but more detailed evaluations are needed once it’s available for full testing later in the year.

Hongqi’s charging capabilities also stand out, with the promise of up to 250 kW peak fast charging, allowing for 200 km of range in just five minutes. Although full performance tests were not possible during the short drive, initial impressions were positive, especially in terms of comfort. Prices for the first 200 units of the EH7 and EHS7 in France are set at 49,900 and 53,900 euros respectively.

Headline Roundup

💡 EU Tariffs Won't Impact Chinese EV Prices in 2024 (EAN)

The European Union’s decision to impose tariffs on Chinese-made electric vehicles is not expected to impact car prices in 2024, according to manufacturers. MG Motor, the top-selling Chinese brand in Europe, has stated that its electric vehicle prices in France and Italy will remain unchanged this year despite the high tariffs. BYD, another major Chinese EV maker, will also maintain current prices in Italy until the end of 2024. While these companies aim to avoid price hikes in the short term, they have left the possibility open for changes in 2025 as the situation evolves.

European brands are also affected by these tariffs. Cupra, for example, imports its all-electric Tavascan SUV from China and described the tariffs as a "punishment," though prices will remain steady for 2024 deliveries. Other brands like Tesla, Volvo, BMW, and Polestar are also subject to these tariffs, which range from 7.8% to 35.3%. Some manufacturers, such as Volvo, plan to shift production to Europe to avoid the rising costs from these tariffs.

💡 High Tariffs Threaten Chinese EV Sales in Europe (EAN)

Starting this fall, Chinese automakers face higher tariffs when importing electric vehicles to Europe. On top of the regular 10% import tax, significant punitive tariffs will be added, potentially leading to some models disappearing from the market. MG, which competes with the VW ID.3, could see its prices rise due to a 35.3% tariff on its MG4, though it may not fully pass the cost to consumers. BYD will face a 17% tariff, impacting models like the Atto 3 and Dolphin. European brands, including BMW, Mini, and Cupra, are also affected, as they import certain electric models from China.

Tesla, however, will see minimal impact with just an 8% tariff on the Model 3 produced in Shanghai. The tariffs also affect Nio, Volvo, and Dacia, with some automakers considering shifting production to avoid these additional costs. The move has sparked criticism, with VDA President Hildegard Müller describing the tariffs as a step away from global cooperation, and the German government opposing the decision.

💡 Chinese Automakers Take Over Russian Car Market Post-War (EAN)

Chinese automaker Chery has begun using former Volkswagen, Mercedes-Benz, and Nissan factories in Russia to assemble vehicles like the Tiggo SUV and Exeed models. These facilities, abandoned by Western manufacturers after the Ukraine war, are helping Chery expand its production in Russia, where Chinese brands now dominate the market. More than half of cars sold in Russia are from Chinese manufacturers, as the Russian government incentivizes local production by imposing tariffs on imported vehicles.

Chery's move reflects China's growing influence in Russia’s economy. While Chery hasn’t confirmed if these factories will be part of its long-term strategy, other Chinese brands like JAC are also capitalizing on the opportunity. With the EU set to introduce tariffs on Chinese EVs, Chery may consider setting up production in Europe to avoid these costs, just as it has successfully done in Russia.

💡 Nio Sets Battery Swap Record, Expands with New Stations (EAN)

Nio has set a new record in battery swapping, completing over 103,000 swaps in just 24 hours. Since 2018, Nio has conducted more than 54.6 million swaps, with the latest advancements including the introduction of fourth-generation battery swap stations, which can hold up to 23 batteries. The company is also integrating its sub-brand Onvo, which launched the L60 electric SUV in China, using the same swap stations. Nio aims to operate over 1,000 swap stations by the end of 2023, enhancing compatibility for multiple battery types.

Nio's new swap pricing model is based on kilowatt-hour consumption rather than a flat rate, allowing customers to benefit from newer battery technologies. This includes the ability to upgrade older vehicles to longer-range batteries. Despite the integration of Onvo’s battery systems, Nio assures that its existing customers will not face delays or issues, with real-time cloud management minimizing wait times.

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Sebastian & team | China EV Pulse

📸 _{Image Credits (in order of appearance): GAC - Hongqi - shutterstock / 1204164946}