China’s electric car makers have set their sights on winning over European drivers and large corporate customers with more affordable cars that come with higher safety ratings and plenty of high-tech features.
In the past few months, many Chinese electric vehicles have earned five-star ratings from the European New Car Assessment Program (NCAP) — an achievement that requires loading vehicles with active and passive safety features that exceed legal requirements.
More are coming.
“All Chinese electric vehicle makers would like to have a five-star rating in Euro NCAP in order to be more competitive in the European market,” said Brian Guo, president of Chinese electric vehicle maker Xpeng.
Gu said Xpeng has spent the past three years building stores and service centers in Denmark, the Netherlands, Norway and Sweden — with some initial sales in Norway — ahead of next year’s official launch of the P7 and G9 electric sedans. SUV in the four countries.
Chinese electric car makers have realized that safety plays an incredibly important role in the sales process, said Matthew Avery, director at Thatcham Research, a UK car research center funded by insurers and a board member of Euro NCAP.
The five-star Euro NCAP ratings are seen as key to overcoming remaining European concerns about the quality of Chinese-made cars, after egregious failures of crash tests in 2006 and 2007 created the impression that cars from China were unsafe.
Perhaps more importantly for sales, higher safety ratings also open up the potentially huge corporate fleet market for Chinese electric vehicle makers.
Fleet sales make up about half of all vehicle sales in key markets including Germany, France and the UK, and many corporate buyers place a premium on safety.
“Fleet sales are very important and many fleets have a mandatory five-star car-buying rating,” Avery said.
Car rental companies
Furthermore, many fleets would like to convert to electric vehicles quickly to achieve sustainability goals. But the company’s fleets have struggled to get enough electric vehicles in Europe as supply chain issues have delayed waiting times for some models by more than 12 months.
Rising demand for electric vehicles amid supply chain shortages has allowed European automakers to raise prices for electric vehicles and focus more on retail customers, rather than customers like car rental companies that have traditionally been less profitable for them.
That has created an opportunity for Chinese electric vehicle makers who have already stolen a rally against most foreign competitors in China, the world’s largest market for electric vehicles.
In October, for example, German car rental company Sixt said it would buy about 100,000 electric cars from it. BYDstarting with the Atto 3 SUV which received the coveted Euro NCAP five-star rating in the same month.
China’s Great Wall Motors (GWM) earned five-star ratings in September for its WEY Coffee 01 hybrid SUV and ORA’s electric vehicle Funky Cat brand.
European automakers are also seeking five-star ratings for their electric and hybrid vehicles, from BMW iX to Volkswagen ID.4 and ID.5. in October, Mercedes It received the highest rating for its EQE sedan and its driver-assistance features received the highest score to date from Euro NCAP.
Chinese electric car maker Aiways has not only put its U6 electric crossover through the steps of NCAP, but it is also seeking the highest rating on offer, said Alexander Klose, who heads the company’s operations outside China.
He said Aiways has invested in additional safety features for the U6 to create sales opportunities for European fleets, including car rental companies, when it goes on sale next year.
“There will be natural demand for vehicles like ours that are fully equipped and very competitively priced,” he said, adding that Aiways hopes to sell 30,000 electric vehicles in Europe in 2023, up from about 5,000 this year.
French car consultancy Innoviv said about 155,000 Chinese-made cars were sold in Europe in the first nine months of 2022, or 1.4 percent of the market. Chinese companies are on track to reach 150,000 vehicles this year, nearly double the 80,000 vehicles sold in 2021.
But nearly half of Chinese cars sold were electric cars, according to Innoviv, giving them 5.8 percent of the all-electric car market in Europe.
All Chinese cars sold in Europe will be electric cars within a few years, said Vice President of Inoviv Jamal Taganza, with more low-cost models on the way.
By 2030, Inovev estimates that electric vehicles will account for 40 percent of new car sales in Europe and that Chinese brands will account for 12.5 percent to 20 percent of the all-electric market, with sales of between 725,000 and 1.16 million vehicles.
“This is a conservative forecast,” Taganza said. “But it could grow even faster, especially if European automakers don’t respond to Europe’s needs for affordable electric vehicles.”
Achieving a five-star rating is costly for automakers because it means investing in additional safety features from supplemental airbags to collision avoidance, driver assistance and driver monitoring systems.
Thatcham’s Avery said the Chinese electric car makers had been actively engaged with Euro NCAP and were eagerly making the investments needed to get top ratings.
“Forget what you might think Chinese means lower quality or lower security performance,” he said. “Its quality now is better than others.”
BYD is launching three vehicles in a handful of European markets and will add more models and markets next year, all of which should have high safety ratings, said Michael Shaw, BYD Europe Managing Director.
“We think a five-star rating should be a very basic requirement,” he said.
Take advantage of this feature
Meanwhile, Great Wall Motor’s ORA Funky Cat will launch in Britain, Germany, Ireland and Sweden later this year.
Starting at around £32,000 (roughly Rs. 3,088,450) in Britain, or about £5,000 (roughly Rs. 4,82,600) cheaper than VW’s ID 3, Funky Cat features include facial recognition for storing seating preferences, driver assistance systems, reverse camera charging and wireless phone charging.
Toby Marshall, UK Sales and Marketing Director for GWM’s ORA brand, said that if a car is well-built, loaded with features, has a high safety rating and is competitively priced, it doesn’t matter where it’s made.
“These are the main components that matter to car buyers,” Marshall said, as he showed off the funky cat in his Solihull office in central England.
The problem for many international automakers is that they have ceded the advantage to Chinese competitors when it comes to building low-cost electric vehicles, said Bill Russo, head of Shanghai-based consultancy Automobility.
“The only place on the planet where you will find an affordable electric car today is China,” Russo said. “And they take advantage of this advantage.”
© Thomson Reuters 2022