Munich Auto Show: Chinese EVs Emerge in Full Force, What About Europe?

The Munich IAA Mobility Show (also known as the Munich Auto Show) is ending today, and it gave us a sneak peek into the electric future of the auto world. It’s no surprise that China’s stealing the show in this field, but is Europe ready to roll with the punches in this EV arena?

China’s Rising Influence

Man in a suit presenting BYD cars on stage
A force you can’t ignore—China emerges as a key player in the EV industry with new lineups. Source: BYD

This year’s IAA was a testament to Asia’s automotive prowess, with roughly 41% of exhibitors hailing from the continent. Notably, Chinese companies doubled down on their presence, showcasing their electric might. Big players like BYD, CATL, and XPeng flaunted their battery wizardry and EV manufacturing mojo.

Gilles Le Borgne, Renault’s engineering head, gave it to us straight. Europe needs to wise up and see China for what it is—a juggernaut in the global EV supply chain. China’s got a stranglehold on the entire battery supply chain, from the raw materials to churning out batteries at scale. That’s a game-changer Europe can’t ignore.

Price Wars Are On

A white BYD Seal sedan parked outside at the Munich auto show
Following right behind Tesla in the EV pricing war is China’s BYD. Source: Wikipedia

At the heart of this electric revolution is the price war. Tesla was front and center, flaunting its souped-up Model 3 priced at €42,990 ($46,400) for the European market. Elon’s not holding back, and traditional automakers are scrambling to keep up. However, the Chinese are not far behind. BYD presented the Seal D-sedan at the auto show this year with a starting price of €44,900, which only costs a bit more than the Model 3.

Mercedes-Benz and BMW, the German giants, aren’t sitting idly either. Mercedes showed off the CLA compact class, while BMW unveiled its Neue Klasse, both promising more range, better efficiency, and production costs slashed in half. It’s clear that the old guard is feeling the heat. However, these two legendary automakers are targeting customers at the top of the pyramid, with luxury as their focal point. 

BMW Vision Neue Klasse 2/3 Concept vehicle 2023 exterior 2/3 side view, driving in forest
European automakers responded to the Chinese EV invasion with their own models.  Source: BMW

Amidst the electrifying buzz at the Munich IAA mobility show, Volkswagen also threw a dash of nostalgia into the mix. They introduced the ID GTI concept, a performance version of their upcoming compact electric car. This snazzy ride pays homage to the iconic Golf GTI, a legend that made its debut a whopping 48 years ago.

This concept car is built upon the ID2all concept that VW unveiled earlier this year, with plans to hit the streets in 2025 at an attractive price point of around €25,000 ($26,800). Volkswagen is proving that electric doesn’t mean sacrificing the thrill of the drive. In their words, it’s a sports car for the electric age, perfect for everyday adventures.

On top of all this, Mercedes has also announced a G-wagon that will be smaller and cheaper. Both the release date and pricing are not known yet, but what we do know is that the EQG (a larger and electric G-Wagon) is planned to enter the market in 2024.

However, with these European big names releasing luxury models and announcing affordable cars that won’t be released until years later, is it enough to battle the existing Chinese EVs that are already here and already affordable?

The Giant in the Room

The elephant in the room at this Munich Auto Show is China’s growing dominance in the European EV market. The price gap is striking; Chinese EVs cost less than €32,000 ($35,000) in the first half of 2022, while their European counterparts demand a heartier €56,000. 

BMW CEO Oliver Zipse spilled the beans, saying, “The base car market segment will either vanish or won’t be dominated by European manufacturers,” hinting at China’s relentless expansion.

Changing of the Guard

Fabian Brandt from Oliver Wyman summed it up nicely: “What used to be a show of strength by the German car industry has turned into a meeting of equals between forward-thinking players worldwide, especially China.”

And to prove the point, a Chinese EV conference, held outside China for the first time as part of the IAA, brought together heavyweights from China and Germany. You had the big German carmakers and suppliers, rubbing shoulders with Chinese players like LeapMotors and Horizon Robotics. It’s like a glimpse into the future of collaboration.

Final Lap at the Munich Auto Show

The Munich IAA mobility show of 2023 gave us a glimpse into a high-octane, electric future. China’s all in, and the price wars have begun. European carmakers are at a crossroads—adapt or fade into oblivion. 

As the dust settles, one thing’s for sure: the road ahead is electrifying, and the race is on to see if Europe can keep pace with China’s turbocharged drive towards an electric tomorrow.

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