Interview: Chinese NEVs attractively priced with "a lot of progress": Dutch economist

(Xinhua) 10:12, November 11, 2023

THE HAGUE, Nov. 10 (Xinhua) -- The surge in popularity of Chinese new energy vehicles (NEVs) in the European market is not solely attributed to attractive prices, but due to improved quality following "a lot of progress" by Chinese automakers, a Dutch economist said in a recent interview with Xinhua.

Rico Luman, senior sector economist at ING Bank, said that Chinese electric cars boast attractive pricing, even considering a 10 percent import levy in Europe, making them a compelling choice for consumers.

Beyond affordability, the appeal of Chinese NEVs extends to their diverse models, exemplified by brands like BYD and MG, he said.

Not only the attractive prices led to the popularity of Chinese cars, but "remarkable as well is that surveys suggest that drivers in Europe are generally also positive regarding the quality," Luman said, highlighting the cost-effectiveness of Chinese NEVs.

"This seems different from the past where (quality) concerns were more prominent," he said, adding that this can probably be explained by the fact that Chinese players are the early runners in the NEV market and made a lot of progress already in improving their products.

Talking about the recent announcement of cooperation between Stellantis, one of the world's leading automakers, and Chinese NEV frontrunner Leapmotor, Luman said that the deal benefits both sides, with Stellantis currently barely represented in China and Leapmotor hardly visible in Europe and the United States.

This agreement offers Stellantis an easier entrance to the world's largest car and NEV market, which still has ample growth potential as the middle class grows, he told Xinhua. The partners may aim to make use of each other's sales networks.

Another consideration for Stellantis may be the potential for easier entrance to Chinese supply chains and the ecosystem, as battery supply remains highly dependent on China, said the economist.

In China, a consolidation on the supply side is imminent, with 50 active brands in NEVs, but not all will survive as the market matures, he said. For Leapmotor, the advantage lies in being connected with a robust international partner. Luman drew a parallel with the recent deal between German car manufacturer Volkswagen Group (VW) and Chinese electric vehicle startup Xpeng.

"Although VW already enjoys significant market share in China, it struggles to gain ground in NEVs," and Xpeng is an ambitious manufacturer, he said.

VW reached an agreement in July to buy a 4.99-percent stake in Xpeng and co-develop two NEV models for the Chinese market.

"The transition to electric cars strategically rattles the global car market," Luman said. "It opens opportunities, but this historic shift will also restructure market positions of incumbents."

"China is a leading EV market which is ahead of Europe and the U.S. in terms of development. Next to the fact that it's also the largest global market, global manufacturers realize that they can't afford to miss out to benefit from this," he said. 

(Web editor: Peng Yukai, Sheng Chuyi)


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