Many Chinese electric carmakers have made Southeast Asia and Europe their major export destinations, senior executives said at the 2023 China Auto Forum held from July 5 to 7 in Shanghai.
“The entire Southeast Asian auto market has been long under the monopoly of Japanese brands and the new energy transformation has brought new growth opportunities for Chinese auto brands,” Xu Wenqiang, director of international business at GAC Energy Technology, a joint venture established by GAC Aion and its parent GAC Group, said on the three-day forum, which concluded on July 7.
He also predicted that the penetration rate of new energy vehicles will reach 35 percent in Southeast Asia by 2030. With a highly concentrated market, Indonesia, Thailand, Malaysia, Vietnam, and the Philippines will account for over 95 percent of NEVs in Southeast Asia, as the penetration rate of such autos gathers speed.
At present, SE Asian nations support EV transformation, of which Thailand has the strongest supporting policy and the best market prospects. Malaysia boasts great potential and low barriers, while the Philippines, Vietnam, and Indonesia are in the cultivation stage. But the NEV development stage varies across SE Asia, and the lack of charging facilities restricts the growth of NEVS, Xu suggested.
Competition in China’s domestic market is fierce, noted Gao Yuan, head of overseas business at Voyah, a high-end NEV brand under Dongfeng Motor. Chinese firms want to work together to grow “bigger and stronger” in the overseas auto market by referring to the export experiences of Japanese and South Korean carmakers, he added.
Believing that Europe has better consumption power, high acceptance of NEVs, and is conducive to improving brand image, Voyah has chosen Norway as its first export stop. Voyah has already entered that country’s market and Israel, and will also tap the German, French, Italian and Spanish markets by next year or 2025 at the latest.
Europe has come out with many rules and regulations, such as the European Union’s regulation on batteries and spent batteries which introduced the concept of the ‘battery passport,’ said Sun Xiaohong, secretary-general of the auto unit of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.
Battery Passports
Carmakers will not be able to enter the European market without these passports. Also, the regulation requires that the production, use, disposal, and recycling of batteries conforms to the rules, which should have a greater impact on China’s export of NEVs to Europe. As a result, he called for the establishment of a dialogue mechanism with Europe.
Last year, Chinese vehicles accounted for 2.9 percent of the EU car market, which was very small, Sun noted, adding that their market share is expected to be 3.4 percent at most this year, which means the EU does not need to worry too much about Chinese NEVs.
He also believed that the gap between NEV growth in the EU and China is mainly because of the mismatched stages of development, as China’s NEV development started earlier. This means that at the point where the EU and the United States increased their NEV subsidies was when China’s supporting policies and measures for NEVs began to decline.
The current pricing of Chinese vehicles in Europe has nothing to do with dumping, which means prices as a whole are reasonable, Sun said. So China hopes that both parties will properly handle this issue based on the principle of mutual benefit and trust.
Per data from the China Association of Automobile Manufacturers, in the first five months of 2023, China exported around 1.76 million vehicles, an 82 percent surge from a year ago. Of them, 457,000 were NEVs, making up almost 26 percent.
So far, SAIC Motor has manufactured and sold MG-branded vehicles in Thailand, Great Wall Motor has acquired the Thailand plant of General Motors for renovation, and BYD, Hozon Auto and Changan Automobile have all announced the setup of electric car plants in Thailand.
GAC Aion, meanwhile, also officially declared its export of vehicles to the Thai market as well as preparations for localized manufacturing at the end of last month. Nio, Xpeng Motors, BYD, Zeekr, and Voyah have all had sales in Europe.
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