First it was SAIC, then Great Wall and now BYD: Chinese car companies' European electric car launches are extending into the UK, too.
There are more Chinese car brands selling in Europe, among them Nio and Xpeng, only right-hand drive development holding them back from a launch here. On the consumer pages of our magazine and website, it feels like there’s a new Chinese car being reviewed with a test drive in Europe or the UK every other week.
The nervousness around the established European car makers continues to grow with the launch of each of these technology-rich, low-priced Chinese electric cars. They fear not only the drop in sales and market shares from these newcomers but also their inability to compete on price that threatens their industrial footprint.
Simply put, European car makers are not able to compete on price in the manufacture of electric cars compared to their Chinese counterparts. Labour costs are lower and the supply chains are more sophisticated for batteries, with manufacturing costs touted at around €10,000 lower per vehicle.
Carlos Tavares, a man infamous for running a tight budget, told me recently that even as someone “not complacent on costs” in his role as Stellantis CEO, “if I cannot fight with them [Chinese EV makers] on cost structure, how is anyone able to do that? How can a company with 7% profitability - and we’re at 13% - sell a €25,000 EV at a profit?”
They can’t. Which, in Tavares’s eyes, leaves three options: competing on costs (but “if you go in that direction you put a big cross in the western automotive industry” as lower wages are a non-starter), impose tariffs, or find a technology breakthrough.
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