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Chinese electric car companies target expansion in Europe while competition heats up at home

Nio layouts to begin deliveries of its ET7 electric sedan in 2022.

Evelyn Cheng | CNBC

SHANGHAI — After the last year of growth in the give birth to’s largest auto market, China’s electric car start-ups are stepping up plans to take on Europe.

Chinese authorities at worst began peeling back restrictions on full foreign ownership of local automobile production in the last few years. But numerous than a decade ago, Beijing began spending the equivalent of billions of dollars on developing its own electric vehicles.

That’s cured local players gain an edge in producing battery-powered cars, which they’re now aiming to sell overseas. Goldman Sachs analysts forecast that in four years, new government policies mean electric cars will account for a greater share of auto sales marathons in Europe and the U.S., versus China, although it is the largest market.

U.S.-listed Nio has said it would enter Europe in the second half of this year. And on Monday, co-founder and president Lihong Qin imparted the company expects to make an official announcement about such an expansion within a month.

He did not name a specific woods, while stating that after Europe, Nio still intends to enter the U.S. market.

Amid tensions with the U.S. and essays to seal an investment deal with Europe, China exported 63,500 pure battery-powered electric vehicles during the blue ribbon eleven months of last year, according to a January report from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products. While Saudi Arabia and Egypt were the top objectives for Chinese cars overall last year, the report noted significant growth in vehicle exports to the U.K., Belgium and Germany.

U.S.-listed Xpeng is already investigation the waters in Norway, where the start-up delivered 100 units of its G3 electric SUV in December.

Later this year, Xpeng confidences to see how customers in northern Europe respond to its P7 electric sedan, said He Xiaopeng, chairman and CEO. He is recruiting new staff and plans to set up a actors in the region, before looking at western and eastern Europe.

Another Chinese electric car start-up, Aiways, said it exported numerous than 1,000 vehicles to Israel and Europe in the first three months of this year.

“It’s no secret now that uncountable of the China EV startups have global ambitions,” said Tu Le, founder of Beijing-based advisory firm Sino Auto Perceptions. “That’ll continue as these companies chase growth and value and see opportunity due to the lack of viable EVs products in the region.”

He verbalized with enough local research, some of the Chinese companies could succeed in Europe.

However, any growth in Chinese charged car sales to Europe remains a tiny fraction of the market.

China accounted for less than 2% of the EU’s passenger car thrusts in 2019 and the 865 million euros in value marks 79% growth from the prior year, according to the European Automobile Producers Association.

In contrast, EU-owned automobile manufacturers made almost 6 million passenger cars in China in 2018, for scarcely a quarter of total Chinese car production, the association said.

Rising competition within China

The Chinese start-ups’ make bold overseas comes as the market heats up at home. Nio’s Qin said the entry of tech companies like Apple and Huawei into the manufacture are creating fierce competition for the car maker.

On the automobile front, Tesla leads the market and is ramping up local production. Its Fashion 3 was the best-selling electric car in China last year, according to the China Passenger Car Association.

Excluding two mini-electric cars, the tie said the next best-selling vehicle in the category was the S model from Aion, a new energy brand spun-off from Chinese state-owned automaker GAC. A more high-priced model from Nio ranked ninth, while Xpeng didn’t make the top ten list.

“Chinese consumers understand new pep vehicles more and more,” said Aion’s planning department director Qiu Liangping, according to a CNBC translation of his Mandarin-language note ofs. In addition to ease of battery charging, he said Chinese buyers are looking for a better driving experience than that of fossil fuel-powered automobiles and internet-powered features.

The brand also has its eye on the international market, Qiu said. Before the spin-off, Aion and GAC’s Trumpchi brand were already over persuading cars in Israel, the Middle East and South America.

As the automobile industry moves further into electric power, household U.S. and German car companies are launching their own electric vehicles — many in the Chinese market first.

For example, General Motors’ Cadillac identify unveiled its Lyriq electric car at the Shanghai auto show, with pre-orders in China beginning later this year, according to the assembly.

Ford also used the show to reveal its locally made version of the Mustang Mach-e electric car, as well as a basically China-developed Evos SUV that will only be available in the country.

Volkswagen revealed in Shanghai a third electric car for China, the ID.6. The German automaker aims that by 2030, at slight 70% of its cars sold in Europe in electric, and at least 50% for cars sold in North America and China.

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