How do Chinese new energy vehicles perform in different overseas markets?

Among them, the economical BYD Dolphin and Seal are popular in the Thai market; Lixiang, with its refrigerator, TV, and large sofa concept, is a favorite among Russians; the expensive BYD Atto3 is captivating Israelis; and the spicy “Chopped Pepper Fish Head”-style Wuling is favored by Indonesian middle-class consumers.

On the other hand, in the fiercely contested European market, the domestically low-key MG Motor, relying on its British heritage, channel advantages, and high cost-effectiveness, has surpassed BYD to become the face of the European market.

While Chinese new energy vehicle exports are surging, companies like BYD, Nezha, and Changan are also establishing manufacturing plants overseas, driving the transfer of upstream and downstream industrial chains.

Perhaps, the rise of Chinese new energy vehicles will not only enable people worldwide to drive quality cars but also bring benefits to overseas economies and societies.

Different preferences in tropical and temperate regions

Recently, a pop-up car exhibition was held in Thailand by a well-known brand.

In addition to brands like GAC Aion, Changan Deep Blue, XPeng, and Nezha, Zhou Hongyi from 360 also attended the event. Chinese automakers, media, and influencers encountered familiar faces in Southeast Asia.

The Thai market cannot be overlooked in the overseas expansion of Chinese new energy vehicles. The country's tropical climate and the short stature of its people present opportunities for some automakers.

According to AutoLife, in the first half of 2024, the top two sellers of new energy vehicles in Thailand were the BYD Dolphin and BYD Seal, with sales of 6,394 and 4,270 units, respectively.

BYD vehicles exported to Thailand not only have right-hand drive steering wheels and Thai-language-compatible infotainment systems but also initiate price wars in the Southeast Asian market.

It is understood that in the Thai market, the 480km range BYD Atto3 sells for approximately 170,000 RMB, while the 580km range BYD Seal costs the equivalent of 310,000 RMB.

Thailand's hot climate, small size, and short stature make BYD thrive; however, in cold, vast, and populous Russia, people tend to prioritize range and space, making Lixiang a popular choice.

Relevant data shows that in the first quarter of 2024, Lixiang ranked eighth in Russian auto sales with 8,049 units sold, the only new energy vehicle brand on the list.

Unlike BYD, which reduces prices in Thailand, Lixiang often doubles its prices in Russia. For example, the Lixiang L9, which sells for over 400,000 RMB in China, typically sells for over 700,000 RMB in Russia after parallel imports.

Furthermore, since the Lixiang infotainment system is not Russian-language compatible, some Russian drivers have been forced to learn Chinese to give commands, while others have hacked the system to translate it into Russian.

In response, some netizens joked, "Lixiang has encountered self-adapting drivers in Russia." "I've seen many localization groups, but this is the first time I've seen a Russianization group."

Climate conditions, geography, and other factors influence the overseas expansion of new energy automakers, and the economic situation of different countries also affects their success.

For instance, in economically developed Israel, the best-selling new energy vehicle is the BYD Atto3, a variant of the Yuan Plus, which sells for over 300,000 RMB and sold 14,200 units in 2023.

The locally produced BYD commercial features the song "La Boum" by Sophie Marceau, adding to its prestige.

Wealthy Israelis have embraced the BYD Atto3 as a sales champion, whereas Indonesians, with a GDP per capita just one-tenth of Israel's, cannot afford to be as lavish when choosing new energy vehicles.

The "miracle car" Wuling, known for its low prices in the Chinese market, has found an advantage in Indonesia.

In July 2024, three Wuling models—Wuling Yunduo, Wuling Air, and Wuling Bingguo—were among the top 10 best-selling new energy vehicles in Indonesia.

While various Wuling new energy vehicles resemble "old-man's toys" in appearance, Indonesians consider them a symbol of status.

In Indonesia, with its crowded streets and underdeveloped infrastructure, the "Chopped Pepper Fish Head"-style cars offer convenient parking and good trafficability.

Who is the King of Europe?

Overseas markets with different characteristics bring both joys and concerns to new energy automakers. Europe, with similar climatic conditions, economic status, and infrastructure to China, has become a hotly contested market.

In the first half of 2024, Chinese new energy vehicles sold a total of 95,078 units in the EU's 11 member states plus the UK, Switzerland, and Norway, accounting for 11% of the market.

MG Motor, smart, BYD, and Polestar topped the list with sales of 41,228, 14,674, 12,315, and 12,151 units, respectively.

Why is MG Motor, which has a low profile in China, dominant in the European market? After communicating with industry insiders, I found three possible reasons:

First, its British heritage. MG Motor was founded in Oxford, UK, in 1924, and has been driven by celebrities like David and Victoria Beckham, Queen Elizabeth II, and James Bond (007).

In 2007, this proud member of the British automotive industry was acquired by China's SAIC Motor Corporation and successfully transitioned from domestic sales to exports. Sales in its native UK market account for 30% of its sales in 14 European countries.

Second, its channel advantages. Backed by SAIC Motor, MG Motor has long been active in overseas markets and has over 800 dealerships in Europe, more than the 400 in China, including over 100 in the UK.

MG Motor also designs its products to meet European preferences. For example, in July 2024, the youth-oriented MG MG4 ranked second in Spanish new energy vehicle sales, trailing only the Volvo EX30.

Lastly, its cost-effectiveness. The MG MG4 in the UK sells for the equivalent of 210,000 RMB, while it sells for around 140,000 RMB in China, representing a 50% premium.

In contrast, vehicles like the Volkswagen ID.4, Tesla Model Y, and smart #1 sell for the equivalent of 300,000, 470,000, and 310,000 RMB in Europe, compared to 150,000, 250,000, and 180,000 RMB in China, respectively, with premiums exceeding 70%.

More than just cars

While MG Motor dominates the European market, the situation reverses in other overseas markets.

For example, in the first quarter of 2024, BYD sold 10,087, 10,070, and 4,481 new energy vehicles in Thailand, Brazil, and Australia, accounting for 45.3%, 71.2%, and 17.6% of their respective markets.

Beyond BYD, brands like Geely, Changan, Chery, and Nezha are also expanding overseas to find their niche.

According to the China Association of Automobile Manufacturers, China exported 1.203 million new energy vehicles in 2023, a year-on-year increase of 77.6%, outpacing traditional gasoline vehicles and accounting for 24.5% of total vehicle exports.

From January to May 2024, China exported 519,000 new energy vehicles, up 13.7% year-on-year, with middle- and low-income countries like Brazil, Thailand, and the Philippines as major destinations.

Apart from exporting complete vehicles, Chinese new energy automakers are also establishing overseas industrial chains to achieve local production and sales.

For instance, BYD has set up factories in Thailand, Hungary, Brazil, and Mexico, while Nezha operates in Malaysia and Indonesia, and Changan New Energy is present in Kazakhstan and Thailand.

These Chinese new energy automakers are also bringing the entire automotive manufacturing supply chain to overseas markets.

Upstream battery manufacturers like CATL have factories in Germany, Hungary, and the US, while Guoxuan High-tech has facilities in India, Thailand, and Argentina.

In terms of components like glass, tires, and seats, Fuyao Glass has reduced transportation costs by establishing plants in the US and Germany, while Linglong Tire leverages raw material advantages to build production bases in Thailand and Vietnam. Jifeng Auto Trim Systems is also shifting capacity to Mexico, Poland, the Czech Republic, and Brazil.

It is evident that the overseas expansion of Chinese new energy automakers not only enables overseas users to drive affordable Chinese cars but also positively impacts local industries, employment, and taxation.

After all, giving a fish is not as good as teaching how to fish. For Chinese new energy automakers, enabling people worldwide to drive smart and quality cars may be their long-term vision.