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- Only one Chinese carmaker will succeed in Europe – and it’s not who you think.
Only one Chinese carmaker will succeed in Europe – and it’s not who you think.
Sebastian Henßler
March 11, 2025
Welcome to this edition of the China EV Pulse Newsletter!
In today’s newsletter, we spotlight the challenges and strategic maneuvers shaping the landscape for Chinese carmakers in Europe. While only MG Motor under SAIC’s banner is thriving significantly, others face uphill battles amid stiff competition and regulatory hurdles.
We delve into the implications of EU tariffs on Chinese-made electric vehicles, which have prompted a strategic pivot to internal combustion engines and hybrids by companies like BYD to maintain market traction. Moreover, we explore the broader implications of these shifts for the European market, including potential adjustments in pricing strategies and the looming consolidation forecasted to impact China’s automotive sector.
Additionally, we spotlight Nio's efforts toward profitability with its innovative battery swapping stations, and the looming data privacy concerns that could redefine how Chinese companies handle European consumer data.
Lastly, we explore BYD’s upcoming launch of a groundbreaking 1000-volt charging platform, set to revolutionize EV charging standards, and Volkswagen’s strategic shift to LFP batteries in the Chinese market to enhance the competitiveness of its ID.3 model.
Join us as we unpack these pivotal developments that are reshaping the automotive industry, from market dynamics and technological innovations to regulatory challenges and strategic shifts.
Happy reading!
Content
Copyright: Sawat Banyenngam / Shutterstock
Only MG Motor Thriving as Chinese Carmakers Struggle in Europe
According to Jochen Siebert, founder of JSC Automotive, among the rising number of Chinese automakers entering the European market, only one currently stands a real chance: SAIC, through its MG Motor brand. Siebert points to 2024 German sales figures, highlighting that while competitors such as Great Wall Motors and BYD sold around 3,000 vehicles each, and others like Xpeng, Leapmotor, and Nio struggled with only hundreds of sales, SAIC significantly outperformed, selling approximately 21,000 vehicles in Germany alone and around 250,000 across Europe.
SAIC's successful strategy involves careful market analysis and local adaptation, offering vehicles closely resembling local market leaders but priced approximately 10% lower. Siebert anticipates SAIC nearly doubling its European sales to between 500,000 and 600,000 units within five years. Furthermore, when the EU introduced tariffs on electric vehicles, MG Motor swiftly adapted by increasing its combustion-engine lineup, thus avoiding tariff impacts.
However, Siebert cautions that SAIC's competitive advantage could diminish if European automakers resume building affordable vehicles, though he sees this scenario as unlikely in the near future. He emphasizes that for Chinese automakers to succeed in Europe, local management is crucial—a strategy SAIC has embraced but others have neglected. Moreover, Siebert predicts significant consolidation in China's automotive market within the next five years, driven by intense price pressure and shrinking profit margins, describing it as an impending "implosion" for many manufacturers.
Chinese Carmakers Shift Strategies as EU EV Tariffs Bite
The implementation of EU tariffs on Chinese-made electric vehicles continues to significantly impact the market. According to the latest European Electric Car Market Intelligence Study by Matthias Schmidt, the market share of Chinese electric vehicle brands in Europe hovered between eight and nine percent at the end of December 2024. This marks a continued decline since tariffs took effect in July, following an initial surge in sales as manufacturers cleared inventories ahead of tariff implementation and new cybersecurity regulations requiring advanced type approvals.
Facing these tariffs, Chinese automakers have shifted their strategies, increasingly focusing on internal combustion engine vehicles and plug-in hybrids, which are not affected by the new regulations. The share of battery-electric cars among newly registered Chinese vehicles dropped sharply, from around 60% in June to under 40% by December. BYD exemplifies this shift clearly, now delivering nearly 40% plug-in hybrids among its total sales.
However, conditions for Chinese EV exporters may soon improve due to anticipated reductions in shipping costs. Freight rates for car carriers are expected to decline by up to 50% from recent highs of around $120,000 per day. Additionally, the introduction of new reinforced-deck RoRo ships capable of transporting EVs on all levels could further enhance competitiveness by reducing export costs.
Chinese manufacturers are also strategically targeting markets outside the EU, notably the UK and Norway, which are unaffected by the tariffs. Analysts predict Chinese brands will capture approximately 10% of Europe's EV market by 2025, potentially reaching almost 12% by 2027, aided by new manufacturing facilities in Hungary and Turkey and declining shipping costs. Furthermore, regulatory mechanisms such as emissions credit trading, leveraged by manufacturers like Polestar in collaboration with Mercedes, Volvo Cars, and Smart, could offset some tariff impacts.
Source: Matthias Schmidt – European Electric Car Market Intelligence Study
Copyright: Nio
Nio's Battery Swapping Stations Expected to Hit Profitability Next Year
Analysts from Western Securities predict that Chinese automaker Nio could reach profitability with its battery swapping stations by the end of next year, according to a report by CnEVpost. They highlight that conditions for Nio's business are already improving significantly, partly due to the launch of new brands Onvo and Firefly, aimed at expanding the company's market presence and customer base.
The core issue currently preventing profitability at Nio’s battery swapping stations is the insufficient daily usage, which fails to cover operating and depreciation costs. However, increasing vehicle sales and widespread adoption of Nio’s latest generation of battery swapping stations provide optimism. Analysts expect the entire battery-swapping business to become profitable by late 2026. Nio previously indicated that a station achieves profitability at around 60 to 70 battery swaps per day.
Shen Fei, Vice President of Nio’s power business, expressed confidence in the profitability potential, particularly highlighting Shanghai as a profitable location. Nio, headquartered in Shanghai, has nearly 3,200 swapping stations across China and has expanded its network into Germany. The stations enable drivers to swap a nearly depleted battery for a fully charged one within minutes.
The Bavarian Data Protection Authority (LDA) has reportedly launched an investigation into Chinese automaker Nio over potential violations of data protection regulations, according to Spiegel Online and Golem. The inquiry focuses on allegations that Nio might be transmitting data collected by its electric vehicles to servers located in China. Concerns arose following tests by Norwegian engineer Tor Indstøy, who claimed most data from his Nio EL8 were sent to Chinese servers, a claim that Nio has firmly denied.
Nio's privacy policy acknowledges international data transfers, including to China, but the company insists data typically remains within European infrastructure. The Bavarian authority aims primarily to understand better how Nio processes data, although proven violations could lead to significant fines, potentially worsening Nio's market position in Germany and across Europe—already impacted by EU tariffs.
Data privacy remains a sensitive issue in modern vehicles, regardless of powertrain type, and similar cases have affected other brands, including Tesla. Meanwhile, Nio’s recent sales in Germany have shown a notable decline, with just 43 new registrations in January and February—a drop of over 20% compared to the same period last year. In contrast, competitors like MG Motor and BYD saw much higher registration numbers, with MG Motor reaching nearly 3,400.
Copyright: TY Lim / Shutterstock
BYD to Launch Ultra-Fast 1000-Volt Charging Platform in March
BYD is set to launch its new 1000-volt platform in mid-March, significantly enhancing fast-charging capabilities, according to Car News China. This platform will allow charging rates up to 5C, meaning batteries could charge at five times their capacity. For example, a 60 kWh battery could charge at 300 kW, and an 80 kWh battery at 400 kW, delivering approximately 300 kilometers of range within five minutes.
Initially, BYD plans to integrate this advanced technology into high-end models, potentially starting with the soon-to-be-released Han L and Tang L models. Additionally, China is expected to significantly expand its high-power charging infrastructure to support this advancement, marking a major leap forward in the country's EV capabilities. The new platform’s charging power surpasses existing 800-volt systems by approximately 50 kW.
BYD has significantly improved its charging performance in recent years. Current models such as the BYD Sealion, available in Germany, already feature an 800-volt platform capable of 230 kW charging. According to Car News China, high-voltage platforms reduce battery strain, improve longevity, and enable faster charging.
BYD is also reportedly developing a fully electric architecture, codenamed "Box," aimed at further enhancing energy efficiency and system integration. Furthermore, leaked information suggests BYD is preparing a cutting-edge charging station capable of 6C charging at 1000 volts, pushing charging capabilities even further.
Volkswagen Shifts to LFP Batteries for ID.3 in Chinese Market
Volkswagen has introduced a refreshed version of the VW ID.3 electric hatchback in China, now equipped with an LFP (Lithium Iron Phosphate) battery instead of the previous NMC (Nickel-Manganese-Cobalt) battery, according to Car News China. The base model remains priced at 119,900 RMB (€15,600), with the top-end version costing 136,900 RMB (€17,800). The Chinese-produced ID.3 features a 53.6 kWh battery provided by CATL, promising a range of 451 km under the generous Chinese testing cycle—likely translating to below 400 km in the European WLTP cycle.
Charging capability details were not fully disclosed, but Car News China estimates moderate charging speeds, noting a recharge from 30% to 80% in approximately 48 minutes, suggesting an average charging power of around 33.5 kW. Although LFP batteries are typically larger and heavier due to lower energy density, they offer advantages in cost, longevity, sustainability, and safety compared to NMC batteries.
The refreshed ID.3 retains a 125 kW rear-wheel-drive system, with a stated energy consumption of 13.4 kWh per 100 km. Interior improvements include a larger central touchscreen, now nearly 13 inches instead of the previous 10 inches, slimmer bezels, removal of physical buttons, and a redesigned center console featuring wireless charging and cup holders, significantly enhancing the interior quality.
Volkswagen faces considerable challenges in the Chinese market, with ID.3 sales declining sharply—only 2,623 units sold in January, down by nearly two-thirds compared to the previous year. Car News China highlights persistent criticisms around connectivity, digital user experience, and ADAS as barriers. To counter these challenges, Volkswagen aims to boost its presence in China through collaboration with local manufacturer Xpeng, launching two new jointly-developed electric vehicles.
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Sebastian & team | China EV Pulse
📸 Image Credits (in order of appearance): Sawat Banyenngam / Shutterstock
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