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Chinese automakers aim to increase sales in Europe.

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Chinese electric carmakers aim to lure European motorists and large corporate customers with more affordable cars with the highest safety ratings and a host of high-tech features.

Several Chinese EVs have received five-star ratings from Europe’s New Car Assessment Program (NCAP) in recent months — an achievement that requires active and passive safety features to go well beyond legal requirements.

More are coming.

“All Chinese Electric Vehicle makers want to achieve Euro NCAP five-star ratings in order to be more competitive in the European market,” said Brian Gu, president of Chinese Electric Vehicle maker Xpeng.

According to Gu, Xpeng has built stores and service centres in Denmark, the Netherlands, Norway and Sweden over the past three years and conducted some initial sales in Norway before officially launching its P7 electric sedan and G9 SUV into four countries next year.

Chinese electric carmakers have recognized that safety plays an extremely important role in the sales process, said Matthew Avery, director of Thatcham Research, a British car research centre funded by insurers and on the board of Euro NCAP member.

The five-star Euro NCAP rating is seen as key to overcoming lingering concerns in Europe about the quality of Chinese-made cars after horrific crash-test failures in 2006 and 2007 gave the impression that Chinese-made cars were unsafe.

Perhaps more importantly for sales, the high safety ratings also open up a potentially huge market for corporate fleets for Chinese Electric Vehicle makers.

In major markets such as Germany, France and the United Kingdom, where fleet sales account for about half of all car sales, safety is a concern for many corporate buyers.

Fleet sales are very important and a lot of fleets have a mandatory five-star rating for buying cars,” Avery said.

Fleet sales

In addition, many fleets want to quickly switch to electric vehicles in order to meet sustainability goals. But corporate fleets are struggling to secure enough electric vehicles in Europe, as supply chain issues have extended wait times for some models to more than 12 months.

Amid supply chain bottlenecks, high demand for EVs has led European automakers to raise Electric Vehicle prices and focus more on retail customers rather than traditionally less profitable customers such as car rentals.

That has opened a window for Chinese Electric Vehicle makers, who are already ahead of most foreign rivals in China, by far the world’s largest Electric Vehicle market.

In September, China Great Wall received five-star ratings for its Wey-branded Coffee 01 hybrid SUV and Ora-branded Funky Cat electric sedan.

European automakers are also assigning five-star ratings to their electric and hybrid vehicles, from BMW’s iX to Volkswagen’s ID4 and ID5.

In October, Mercedes’ EQE saloon scored top marks for its driver assistance features, the highest Euro NCAP score ever achieved.

Chinese electric carmaker Aiways has yet to test its U6 electric crossover, but it is also aiming for the top rating, said Alexander Klose, head of the automaker’s operations outside China.

Aiways has invested in additional safety features for the U6 to open up sales opportunities to European fleets, including rental companies, when it goes on sale next year, he said.

“There will be a natural demand for vehicles like ours that are fully equipped and come at very competitive prices,” he said, adding that Aiways hopes to sell 30,000 EVs in Europe in 2023, up from about 5,000 this year.

Gaining share

About 155,000 cars made in China will be sold in Europe in the first nine months of 2022, accounting for 1.4% of the market, according to French automotive consultancy Inovev.

Chinese companies are on track to sell 150,000 vehicles this year, almost double the 80,000 they will sell in 2021.

But nearly half of the cars sold in China are electric, according to Inovev, accounting for a 5.8% share of Europe’s all-electric vehicle market.

Jamel Taganza, vice president of Inovev, said that within a few years all Chinese cars sold in Europe will be electric, and more cost-effective models will also be introduced.

Inovev estimates that EVs will account for 40% of new car sales in Europe by 2030, while Chinese brands will account for 12.5% ​​to 20% of the all-electric market, with sales ranging from 725,000 to 1.16 million.

“This is a conservative forecast,” Taganza said. “But it could increase more rapidly, especially if European carmakers do not answer the needs in Europe of affordable EVs.”

Achieving a five-star rating is costly for automakers because it means investing in additional safety features, from extra airbags to collision avoidance, driver assistance and driver monitoring systems.

Thatcham’s Avery said Chinese Electric Vehicle makers have been actively participating in Euro NCAP and are busy preparing the necessary investments to achieve the top rating.

“Forget what you might think that Chinese means lower quality or lower safety performance,” he said. “Their quality is now better than others.”

BYD will launch three models in a handful of European markets and will add more models and markets next year, all of which should have the highest safety rating, said Michael Shu, managing director of BYD Europe.

“We think a five-star rating should be a very basic requirement,” he said.

Electric Vehicle advantage

Meanwhile, Great Wall Motor’s Ora Funky Cat will be available in the UK, Germany, Ireland and Sweden later this year.

Prices start at around £32,000 ($36,330) in the UK, about £5,000 less than VW’s ID3. Funky Cat features include facial recognition for saving seat preferences, driver assistance systems, a rearview camera and phone charging.

Toby Marshall, UK sales and marketing manager for Great Wall Motors’ ORA brand, said when a car is well-made, feature-rich, has a high safety rating and is priced competitively, it doesn’t matter where it’s made.

“Those are the key ingredients that matter to car buyers,” Marshall said, while showing off the Funky Cat at his office in Solihull in England’s Midlands.

The problem for many international automakers is that they are ceding an advantage in making low-cost electric vehicles to Chinese competitors, said Bill Russo, who heads Shanghai-based consultancy Automobility.

“The one place on the planet you will find an affordable Electric Vehicle today is China,” said Russo. “And they are leveraging that advantage.”

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