Auto China Beijing 2024: Affordable EVs – China Offensive as a Lifeline?

For months, large Chinese freighters have been heading towards Germany and Europe. They are loaded with electric cars, including those from the Chinese frontrunner BYD ("Build Your Dreams"), which is shaking up the market in the People's Republic with aggressive discounts. The gigantic ships make an impression, but the Chinese are only at the beginning of their expansion. In 2023, barely 34,000 models from China were newly registered in Germany. However, this number is expected to rise.

Hardly Any Affordable EVs in This Country

It is clear: Due to the economic situation, many car buyers are tightening their belts. And German manufacturers have little to offer for the small budget. The ADAC compiled a list of the 30 most affordable electric cars at the beginning of the year. The costs for acquisition and operation were included, but not any discounts. The first German representative came in at number 9 with the Opel Astra Electric: Acquisition base price without discounts 41,990 euros.

Including foreign VW subsidiaries Cupra (Seat) and Skoda, only 8 out of the 30 cars came from German corporations. Chinese cars were not yet included in the ADAC evaluation.

"German car manufacturers don't need to worry too much about the home market," believes Philipp Kupferschmidt, who is responsible for the automotive industry in the German-speaking region at the consulting firm Accenture. Because the Chinese cars aren't all that cheap after all. "It's the big disadvantage of Chinese car manufacturers that they entered the market very confidently with high prices. They massively misjudged," says the industry expert. "Therefore, there are now significant discounts at BYD." BYD has, for example, the Dolphin as a competitor to the VW ID.3, and the Atto model as a counterpart to the VW ID.4.

Given the difficult situation in the electric car market, German suppliers have received a breather to catch up on development backlogs regarding e-mobility, software, and infotainment, says Kupferschmidt. In addition to the elimination of government premiums, significant price cuts by the electric car market leader Tesla are also causing uncertainty in the market. Many buyers are wondering: How much will my expensive electric car be worth in a few years?

Other experts still see an open flank for the Germans. "For many customers, it is important to be able to buy a car for 15,000 to 20,000 euros," says industry expert Frank Schwope, who teaches automotive economics at the University of Applied Sciences for Small and Medium Enterprises in Cologne and Hanover. "The affordable electric car from China is something like the great hope of the German citizen." Although cars from VW are planned to cost 25,000 or eventually 20,000 euros, "whether they will ever hit these marks given inflation is questionable," doubts Schwope.

Affordability is also seen as a factor in the spread of electric cars by the International Energy Agency (IEA). Growing exports from Chinese manufacturers, which accounted for more than half of all global sales in 2023, could further increase pressure on car prices, the IEA reported in Paris on Tuesday. Chinese companies with production facilities abroad have achieved strong sales in overseas markets with more affordable models that emerged in 2022 and 2023.