Chinese Electric Vehicles: Drag or Driver for Global Markets?
Executive Summary & Key Findings
Market Overview:
- Sales Growth: China has been the largest global market for passenger vehicles since 2009, with a Compound Annual Growth Rate (CAGR) of 7%.
- Electric Vehicle (EV) Dominance: In 2023, EVs accounted for 35% of passenger vehicle sales in China. By 2025, sales of EVs, battery-electric, and hybrid vehicles are expected to surpass those of internal combustion engine (ICE) vehicles.
- Production Outlook: Passenger vehicle production is projected to grow at 14% annually and reach 69% of total Chinese production by 2030.
- Export Activities: Passenger vehicle exports increased from 1.5 million in 2021 to 4 million in 2023, making China the largest exporter of passenger vehicles.
Key Drivers of Growth:
- Government Support: Initiatives dating back a decade have significantly boosted the EV industry.
- Political and Economic Factors: Various regions' electrification goals and the leveling off of the Chinese economy are pushing domestic OEMs to focus on export activities.
- Global Ambitions: Chinese OEMs, particularly in the EV market, are increasingly competitive against traditional incumbents.
Customer Perspectives:
- Survey Results: An ADL study involving over 15,000 respondents across 25 countries reveals global customer perspectives on Chinese EVs.
- Primary Motivations: Value for money (44%) and battery technology (43%) are the top reasons for purchasing a Chinese EV.
- Concerns: Quality (58%), brand reputation (32%), and preference for national brands (31%) are the main reasons for not purchasing Chinese EVs.
Customer Profiles:
- European Markets: The UK and Thailand show high market shares for Chinese OEMs (4.4% and over 10%, respectively).
- Interest Factors: Demographic and automotive profiles influence purchase decisions. For instance, urban and rural differences in Germany highlight varying preferences.
- Forecast: EV start-ups are likely to succeed in Germany and the U.S., while domestic market incumbents could capture entry-level segments in Spain.
Recommendations
For Incumbent OEMs:
- Brand Reputation: Emphasize brand reputation, especially in the premium and luxury segments.
- Domestic Origin: Highlight regional supply chains and strong value creation.
For Chinese OEMs:
- Global Expansion: Accelerate internationalization efforts, focusing on diverse markets and segments.
For Distributors and Dealer Groups:
- Strategic Partnerships: Form alliances to enhance market penetration and distribution networks.
Overall, the report underscores the importance of understanding the evolving market dynamics and customer perceptions to navigate the competitive landscape of the global EV market.
