China: The competition that never sleeps

Chinese electric cars are currently receiving a lot of attention in mainstream media. One reason is the punitive tariffs that the European Union has imposed on e-cars “Made in China”. The government in Beijing has declared the electric car industry to be a key sector and is providing it with favorable loans from state banks. The development, production and sale of electric cars are supported on many levels. The vehicles can therefore be offered at very low prices. For Europe’s car manufacturers, the tariffs could mean a short-term advantage over Chinese competitors. However, it is doubtful that they will benefit Volkswagen, Mercedes and co. in the long term. It is more likely that the Chinese will increase their production capacities in Europe or look for partners for contract manufacturing – and thus possibly become even more competitive.

However, the attention is also due to the faltering sales of e-cars in Germany since the government discontinued subsidies at the end of last year. For a long time, Chinese cars were virtually unsaleable in Germany – mainly for safety reasons. But they have improved considerably, as numerous crash tests have shown. The low-cost models may be just what the willing customers need, if they consider buying an electric car. According to a survey by the Allgemeiner Deutscher Automobil-Club (ADAC), more and more Germans can now imagine buying a Chinese car. According to the ADAC, 80 percent of those planning to buy a fully electric car are even willing to do so.

Data analysts from automotive market researcher JATO Dynamics have therefore taken a look at how sales of brands such as Geely, BYD and MG have developed in Germany since 2020: How high is their market share now? Which drive types are offered? And how many models are sold with a combustion engine or electric drive? We also compare the situation with other European countries.

Sales start slow

In 2020, Chinese manufacturers only sold a single battery-powered vehicle (BEV) in Germany, Europe’s most important electric car market. However, the overall market share of BEVs in Germany was only three percent at the time, with combustion cars still accounting for more than 84 percent. By October 2020, just eight more e-cars had been added from China. From January 2021, the Chinese then also sold plug-in hybrids (PHEVs) in Germany – by the end of 2022, depending on the month, sometimes more BEVs, sometimes more PHEVs. In December 2021, three out of four Chinese electric cars were plug-ins.

Since mid-2022, sales of combustion cars from China have also been slowly increasing. Initially only marginally, but now with higher sales figures. In March of this year, the market share of Chinese brands was already more than 38%, then only 17% in August. Hybrid vehicles from China have hardly played a role since the beginning of 2023. Since then, the market share of HEVs and PHEVs in Germany has been in the single-digit percentage range. Other models such as mild hybrids or electric cars with a petrol-powered range extender, which are popular in China, are not currently offered by BYD & Co.

“Car sales from China are steadily rising in Germany, despite significant monthly fluctuations and relatively low total volumes,” says Eric Haase, Managing Director of Jato Dynamics in Germany. In the first eight months of this year, a good 16,000 of the almost 242,000 fully electric cars registered in Germany came from China. “In contrast, sales of combustion engines are only in the lower three-digit range per month on average – only models with hybrid drives are selling worse,” says Haase.

Combustion engines perform better in southern Europe

The situation is exactly the opposite in countries such as Spain, Italy and Romania. Chinese petrol cars are now finding more buyers there than electric cars from Nio, Geely or Link. In the Iberian Peninsula, just under 4,100 BEVs from China were sold from January to August 2024, but five times as many combustion engines. Hybrids accounted for just over 1,900 registrations. The trend in Italy was comparable. There, too, significantly more customers opted for combustion vehicles. And here, too, significant sales figures have only been recorded since the beginning of 2022. In Romania, sales of Chinese petrol and diesel cars surpass those of electric vehicles, although both remain at relatively low levels.

In Sweden, a pioneer in electromobility and already further along than Germany in the powertrain transition, the Chinese sell virtually no combustion engines at all, but relatively decent numbers of BEVs and PHEVs. Of the almost 6,800 battery-powered electric vehicles registered there in August this year, almost one in ten were Chinese-made. In the best months, there were even more than 2,000. In Germany, on the other hand, the ratio in August was 27,021 to 721. That says it all. “But that probably won’t impress the manufacturers from the Far East,” says Eric Haase. “If sales of electric cars in Germany continue to falter, they will simply try to enter the market more strongly with combustion engines and hybrid models. The experience from other European countries will certainly help them.”

More information on JATO can be found here.