The electric car makers of China are getting ready to expand into Europe following the growth in the largest auto market of the world last year.
In the last few years, restrictions on full foreign ownership of local automobile production have been reduced significantly by Chinese authorities. However the government had also started preparing development of its own electric vehicles and had started spending the equivalent of billions of dollars since more than a decade ago.
That strategy of the government has helped the local electric vehicle making companies to secure a leverage in making battery-powered cars which they companies are now targeting to take to overseas markets.
Even though currently China is the largest market for electric cars, the new policies of government in the United States and Europe will make these two regions selling more electric cars than conventionally powered ones in four years, according to an estimate of Goldman Sachs analysts.
Chinese electric car maker Nio – which is listed in the US, has announced its plans of entering the European market in the second half of the current year. The company expects to make an official announcement about such an expansion within a month, said the company’s co-founder and president Lihong Qin this Monday. While not naming a specific country, he however said that the company will expand into the US after competing in Europe.
According to a January report from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, more than 63,500 pure battery-powered electric vehicles were exported to Europe during the first eleven months of last year even as China and US tensions continue and Beijing attempts to seal an investment deal with Europe.
Even though through last year, the top destinations for Chinese cars on the overall were Saudi Arabia and Egypt, significant rise in exports of vehicle from China to the United Kingdom Belgium and Germany was noted in the report.
The Norway market is already being tested by another Chinese electric maker – the US-listed Xpeng, with 100 units of its G3 electric SUV in December being delivered by the Chinese start-up.
In the first three months of this year, in the first three months of this year, said another Chinese electric car start-up, Aiways.
“It’s no secret now that most of the China EV startups have global ambitions,” said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights. “That’ll continue as these companies chase growth and value and see opportunity due to the lack of viable EVs products in the region.”
Some of the Chinese companies could succeed in Europe with enough local research, he said. He however added that currently, sale of Chinese electric cars in Europe is still only a tiny fraction of the total electric car market of the continent.
According to the European Automobile Manufacturers Association, less than 2 per cent of the total passenger car imports in the European Union in were accounted for by China while the Chinese exports marked a 79 per cent year on year in the region in terms of value with a total export value of 865 million.
(Adapted from CNBC.com)