Chinese electric vehicle (EV) manufacturers are setting their sights on Europe’s declining auto dealers. As European carmakers shift towards direct sales, Chinese companies like BYD, Xpeng, and Great Wall Motor are betting on the traditional dealership model. They believe that dealerships can help them quickly establish robust sales and service networks and build reputations for quality and reliability.
However, these companies face significant challenges. European consumers are not very familiar with Chinese brands. Despite this, the share of pure-electric and hybrid cars sold in Europe by Chinese EV makers like BYD, Nio, Lynk & Co., and Xpeng has risen to 5.6% over the past few years. Most of these sales have come from MG Motor, a brand more associated with its British roots than its Chinese ownership.
The success of these Chinese EV makers in Europe will depend on their ability to convince European consumers to choose their brands over household names like Volkswagen, Renault, and BMW. This task could become even more challenging due to political tensions escalating over the EU’s decision to investigate China’s state support of its EV makers. If this roughly nine-month probe results in new EU tariffs on Chinese EV imports, it could quickly erode a pillar of their competitiveness.
In conclusion, the future of Chinese EV makers in Europe is uncertain. They face significant challenges but also see opportunities in the changing landscape of the European auto industry. Only time will tell if their bet on Europe’s fading auto dealers will pay off.