Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Saturday, Jun 10, 2023

The race for China's electric SUV market is heating up both at home and abroad.

The race for China's electric SUV market is heating up both at home and abroad.

The battleground in the electric vehicle price war is shifting to SUV-styled EVs, the largest section of the market dominated by Tesla and BYD.
The market, already congested with more than 90 models, is likely to grow even tighter, analysts and executives said, with at least 20 new models of both Chinese and foreign brands launching in April, compressing pricing and margins at home and pushing exports.

Analysts believe that EV manufactures in China have followed Tesla's aggressive price reduction by decreasing costs for their own electric SUVs, cannibalizing sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows.

With increased exports of Chinese-made electric SUVs, the trend will spread globally.

"Because of China's ultra-competitive market, we'll see a lot of Chinese exports." Tu Le, founder of Beijing-based advice firm Sino Auto Insights, believes it will be a pressure release valve.

Over the last decade, the SUV market in China has grown to account for about 40% of all cars sold, with 400 SUV models available in all fuel types.

In 2022, nearly as many Chinese-made SUVs were sold as automobiles of any sort in Europe last year, or more than 11 million.

Since Tesla released its locally built Model Y in China two years ago, the popularity of electric SUVs has surged, making it one of the fastest-growing segments in the world's largest auto market.

Among the new models unveiled at the Shanghai Auto Show in April were both domestic and foreign names.

Volkswagen (VOWG_p.DE), BMW (BMWG.DE), and Toyota (7203.T) are banking on new electric SUVs to boost sales in China.

Xpeng (9868.HK) and Nio (9866.HK), both Made in China EV startups, have six SUV models, and EV-only brands developed by Chinese state-owned vehicle firms, such as GAC's (601238.SS) Aion, are also pushing all-electric SUVs.

They will compete with 93 existing electric SUV models in a market with 1.5 million sales in 2022, with the top 10 brands accounting for 84%, according to a Reuters analysis of statistics from the China Association of Automobile Manufacturers (CAAM).

Before Tesla began making Model Ys in China in 2020, there were 76 electric SUVs on the market, with annual sales averaging just 3,000 units.

Despite recent slight price increases, Tesla's Model Y is still 20% less expensive in China than it was in early October, when the carmaker was dealing with growing inventory.


DISCOUNT WAR
Xpeng, Leapmotor (9863.HK) and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off.

Those who refuse to cut prices on existing models in order to safeguard brand value have instead chosen to provide lower-than-expected beginning prices for new models, as well as longer driving ranges and more autonomous driving technologies.

For example, Geely's (0175.HK) (GEELY.UL) luxury EV brand Zeekr priced its new small crossover Zeekr X starting at $27,500, which is 28% less than Model Y and nearly the same price as Honda's (7267.T) CR-V, whose first-quarter sales fell 56%.

Mitsubishi Motors (7211.T) also said last week that production of its Outlander SUV in China would be halted for three months.

According to Le of Sino Auto Insights, the reality is "brutal" for heritage international companies pursuing the mass market with small SUVs priced under $40,000, such as Ford.

Jim Farley, CEO of Ford (F.N), acknowledged severe market competition for two-row, SUV-styled EVs as a factor fueling China's auto export surge.

"That's why they're focusing so heavily on Europe." Europe is a high-end export market. "They're all going there," Farley remarked after a trip to China in April.

According to Farley, Ford would also restructure its China business in order to make one of its joint ventures into an export hub for low-cost commercial electric and combustion vehicles.

General Motors (GM.N), which saw its China profit fall by about a fourth in the most recent quarter, needs new EVs to succeed in order to reclaim its market share in China, but the pressure is severe.

"China has 100 vehicle brands vying for sales and a 50% capacity utilization rate," stated CEO Mary Barra.

Tesla and Renault (RENA.PA) have already been exporting considerable quantities of China-made electric SUVs to Europe. According to Reuters, Tesla will begin exporting Model Y crossovers from its Shanghai plant to Canada, marking the company's first exports to North America.

Chinese automakers have their own ambitions to increase sales of electric SUVs in Europe.

Zeekr stated it would bring the Zeekr X to Western Europe, while BYD's Atto 3 SUV exports more than doubled in the first quarter as the company began taking orders there.

"The styling of it (Atto 3) is in keeping with the higher driving position, the good space," said Mark Blundell, BYD's marketing head in the United Kingdom.

"We just feel like it's a good starting point for us in the UK."

$1 equals 6.9000 Chinese yuan renminbi.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
The Fed fixing the economy
Corporations standing up for “LGDP-LGT-LBG-LGBTQ2+ kids” during ‘Pride Month’ be like:
A Major Ukrainian Hydroelectric Dam BLOWN UP
US and European Intelligence Agencies Uncover Evidence of Ukrainian Role in Terror Attack on Nord Stream Pipeline
Photos and videos of Hunter Biden with underage minors have been released.
The driver has been described by authorities as a 21-year-old woman from Tallahassee
Joe Biden falls at the Air Force Graduation
America's Got Talent…
Elon Musk has been showered with praise by the Chinese public during his trip to China
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
Drone Attack on Moscow's Wealthiest Neighborhoods Suspected to be Launched by Ukraine
AI ‘extinction’ should be same priority as nuclear war – experts
Chinese fighter jet buzzes U.S. Air Force spy plane over South China Sea
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
WATCH THIS: democracy in Russia is so bad!
Ed Davey: It is possible for a woman to have a penis
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Steve Jobs introducing Apple's iPhone, exactly 16 years ago.
Banking Behemoth vs Ex-Boss: The PMorgan-Epstein Entanglement
China overtakes Japan as world's top car exporter
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The official tapes of Trump's deposition in the E. Jean Carroll battery (rape) and defamation case have been released.
King Charles III being crowned.
Newly released video of Donald Trump’s rape trial deposition:
Video: Ukraine MP Punches Russian Representative At Global Meet
El Paso mayor has declared a state of emergency
Russia accused Ukraine of attacking the Kremlin with drones in an attempt to kill Putin
Dutch court orders man who fathered 550 kids to stop donating sperm
Kim Kardashian Lookalike Christina Ashten Dies Of Cardiac Arrest, Hours After Plastic Surgery
Samsung has banned employees from using generative AI services such as ChatGPT
×