As the global auto industry accelerates its transformation to electrification, the European auto industry is experiencing an unprecedented “perfect storm”. In addition to facing traditional problems such as low capacity utilization and high costs, European automakers also have to deal with the pressure of transitioning to electric vehicles (EVs) and fierce competition from Chinese automakers.
Although Europe has been at the forefront of the electrification process, the overall electric vehicle penetration rate is only about 20%. In contrast, China’s new energy vehicle market has developed rapidly, with a penetration rate of 45%. This gap not only makes European automakers feel market pressure, but also makes them face severe challenges in technological innovation and consumer acceptance.
Correspondingly, although European automakers started electrification earlier, in the competition with Tesla and Chinese new energy automakers, the performance of traditional European giants in the electric vehicle market did not meet expectations. Uncertain technology routes, high investment costs, and the gradual decline of traditional automotive business have caused European automakers to suffer a double blow of technical barriers and reduced market share during the transformation process.
With the rise of Chinese local brands such as BYD and NIO, the market share of European automakers that previously occupied a leading position in the Chinese market has been impacted. Last year, BYD replaced Volkswagen to become the best-selling car brand in China; in the third quarter of this year, the sales of Volkswagen, BMW and Mercedes-Benz in the Chinese market all declined.