MUNCHI (Reuters) – German automakers, under pressure from Chinese competition, are accelerating their transition to electric vehicles by forming partnerships with the likes of EV startup Xpeng, President Brian Gu said in an interview on Wednesday.
In the year Eight percent of new EVs sold in Europe in 2023 will be made by Chinese brands, up from 6% last year and 4% in 2021, according to auto consultancy Inovv.
“This may be the darkest time for German automakers, but at the IAA I feel their strong commitment to change,” he said at the IAA auto show in Munich.
Chinese EV startups need to leverage German automakers’ scale, brand and investments to cut costs and survive, Gu said.
Xpeng recently struck a deal with Volkswagen to jointly develop two new models in China. Others, such as LeapMotor, are looking for partnerships to help them grow sales globally and survive China’s highly competitive and strengthening domestic market.
But growing sales further will require overcoming hurdles, including China’s manufacturing outlook, import costs and an underdeveloped EV market.
“Even as we become giants, we need to seek cooperation in a humble place,” said Jia Jianxu, general manager of the joint venture between China’s state-owned SIC and Volkswagen, at an event in Munich organized by the Chinese magazine China Auto Review. on Tuesday.
The number of Chinese companies at the German IAA auto show has doubled, and China’s largest EV conference, the World New Energy Vehicle Congress, is being held at the IAA on Wednesday and Thursday, with the presence of high-ranking officials, including China’s “father of EVs,” Wan Gang.
At the IAA’s opening ceremony on Tuesday, German Chancellor Olaf Scholz said Chinese competition should encourage German industry, not threaten it.
Chinese executives have also expressed their appreciation for what European automakers have to offer.
Yu Zheng, deputy general manager of China Dongfeng Motor, said at the event, “After seeing a lot of new technologies in IAA for two days, I feel a little nervous.”
“Europe will not pause in the EV transition … we still need to strengthen our efforts to improve our capabilities in core technologies.”
(This story has been redacted in paragraph 1 to correct Gu’s title as CEO, not president.)
(Reporting by Zhang Yan; Writing by Victoria Waldersee; Editing by Elaine Hardcastle)
