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Chinese electric car brands are expanding into global markets

YOKOHAMA, Japan (AP) — Osamu Furukawa has driven many Japanese cars for his business of converting classic gasoline-powered models to electric ones. But his favorite ride is an import: A battery-powered SUV from China’s BYD Auto.

BYD Auto is part of a wave of Chinese electric car exporters which is beginning to compete with Western and Japanese brands in the domestic market. They bring rapidly developing technology and low prices that Tesla Inc.’s CFO says “is scary.”

Furukawa said he ordered an ATTO 3 when it went on sale Jan. 31[ads1], for its user-friendly features and appealing price of 4.4 million yen ($33,000) — or about a quarter less than a Tesla.

“It’s perfect,” Furukawa said from his office in Yokohama, southwest of Tokyo.

Other ambitious Chinese EV exporters include NIO, Geely Group’s Zeekr and Ora, a unit of SUV maker Great Wall Motors.

Some compete on price. Others emphasize performance and features, putting pressure on premium Western and Japanese brands.

NIO Inc., which has persuaded buyers in China to pay Tesla-level sticker prices of up to 555,000 yuan ($80,000), says its latest SUV will go on sale this year in Europe. The ES6 has voice-activated controls and a range of 610 kilometers (380 miles) on a charge.

“We are very confident that the ES6 will compete in this premium SUV market,” NIO founder and CEO William Li said in an interview at the Shanghai Auto Show.

Sales of battery-powered vehicles and gasoline-electric hybrids in China nearly doubled last year to 6.9 million vehiclesor half of the global total.

It was backed by multibillion-dollar subsidies from the ruling Communist Party, which is trying to turn China into a creator of clean energy and other technologies. It rattles US and European leaders who see China as a strategic and industrial competitor.

Chinese brands are “serious competition,” according to GlobalData analyst David Leah.

They have “more competitive battery technology” and can “achieve greater economies of scale,” Leah said in an email.

BYD Auto, owned by battery maker BYD Co., went ahead of Tesla total 2022 sales of 1.9 million vehicles. Half were petrol-electric hybrids, while Tesla’s fleet is purely electric.

“We have a lot of respect for the car companies in China,” Tesla CEO Elon Musk said in a Jan. 25 conference call with financial analysts. “They work the hardest and they work the smartest.”

Chinese brands are developing electric cars to compete without subsidies as Beijing shifts the burden onto the industry by requiring them to earn credits for selling electric parts. Prices start as low as 100,000 yuan ($14,500) for a compact SUV with a range of 400 kilometers (250 miles) on a single charge.

“The Chinese are scary,” Tesla CFO Zachary Kirkhorn said on the analyst call.

Chinese EV brands mix research and design centers in the US and Europe with factories in China.

Geely’s Zeekr plans to launch an all-electric sedan and an SUV this year in the Netherlands and Sweden. The mini-United Nations of Chinese and European designers is in Gothenburg, Sweden, next to Volvo Cars, another Geely brand, while the factories are in China.

“Our ambition is to be a key player in electrified mobility in Europe during this decade,” said Zeekr CEO Spiros Fotinos, a Toyota and Lexus veteran. With a “clear global ambition,” he said, “look at the opportunities and the right timing for other markets.”

CEO Carlos Tavares of Stellantis, the parent company of Chrysler, Peugeot and FIAT, warned in January that Europe needs a strategy to compete with China’s lower prices. European-produced electricity costs 40% more than Chinese models, according to Tavares.

“It’s a very bleak scenario,” Tavares told German magazine Automobilwoche. – But it doesn’t have to go that way.

BYD Auto’s exports quadrupled last year to 55,916 sedans, SUVs and hatchbacks. Most went to India, Thailand, Brazil and other developing markets. BYD announced a sale of 1,000 vehicles last year to Mexico’s VEMO for the largest EV taxi fleet outside of China.

State-owned BAIC, headquartered in Beijing, said a dealer in Jordan ordered 1,000 units of its compact EU5 sedan in January. The company said it plans to launch two to three more electric vehicles in Latin America, Southeast Asia and Europe.

What about the US, the biggest, richest market?

Chinese EV brands are wary of a sprawling country that requires heavy investment in dealerships and charging networks, especially as Washington and Beijing tussle over security, technology and human rights.

“This is not an easy task,” NIO’s Li said. “Our products and services must be prepared.”

BYD Auto has been in the US market for a decade, selling battery-powered transit buses assembled in a factory northeast of Los Angeles. It is “still in the process” of deciding whether to sell SUVs and sedans to Americans, the company said in a written response to questions.

Political tensions “make it difficult for a Chinese company to launch, electric car or otherwise,” in the United States, Leah said.

In Europe, Great Walls sells Ora The 03 model starts at 140,000 yuan ($20,000). Ora is trying to differentiate itself from dozens of new brands by marketing its cars as designed for women, their body sizes and daily needs.

“This is a second or third car for a household. It can be used by a wife or daughter to commute to work, to go out with friends or to go shopping, says Ora’s deputy chairman Tan Jian.

In Europe, BYD Auto has partnerships with dealer chains in Great Britain, Sweden, Germany and the Netherlands. The company says it has also delivered cars in Belgium, Denmark and Austria. It has a deal with European rental company SIXT that BYD says will lead to sales of up to 100,000 vehicles over the next six years.

In Japan, BYD Auto plans to have 100 showrooms by the end of 2025. Its Dolphin hatchback and Seal sedan will hit the Japanese market this year. The company says it has also exported around 4,000 ATTO 3s to Australia.

Furukawa’s OZ Co. converts Volkswagen Beetles and other classic models by replacing petrol engines with batteries and electric motors. Furukawa said he rides the ATTO 3 every day and has gone as far as Osaka, 400 kilometers away.

BYD Auto’s Yokohama showroom, which opened on February 2, is surrounded by dealers for established brands including Toyota, Nissan, BMW, Volkswagen and Chevrolet.

A married father of one said he looked at Japanese models but bought an ATTO 3 for the roominess and price.

“I like the ride and it’s easy to ride,” said the buyer, who asked to be identified only by his last name, Ohta. “There are so many great features.”

Ohta’s father had a “negative reaction” to BYD being from China, which has a history of strained relations with Japan. But Ohta said his job in the electronic gaming industry has taught him to respect Chinese innovation.

“They come out with excellent products,” Ohta said. “I have respect for the nation.”


McDonald reported from Shanghai.

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