As Chinese electric vehicle (EV) manufacturers set their sights on Europe, major German auto suppliers are keen to expand their existing partnerships in China to provide these rising automakers with European-made parts.
Bosch CEO Stefan Hartung expressed confidence in Chinese manufacturers’ ability to adapt vehicles for the European market gradually, citing a focus on user experience and customer orientation. He highlighted the familiarity gained through collaborations in China and emphasized the positive impact on competition and consumers.
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Bosch’s collaborations in China include the development of Advanced Driver Assistance Systems (ADAS) for Chinese EV maker BYD, electric motors for luxury EV manufacturer Human Horizons, and serving as a supplier for Nio.
Several prominent Chinese EV manufacturers, such as BYD, Nio, Xpeng, and Leapmotor, are eyeing the European EV market, which witnessed a remarkable 55% surge in sales to approximately 820,000 vehicles during the first seven months of 2023, constituting about 13% of total car sales.
A notable price disparity exists between Chinese and European EVs, with the average Chinese EV costing less than 32,000 euros ($34,350) in the first half of 2022 compared to roughly 56,000 euros in Europe, according to Jato Dynamics researchers. This price difference has raised concerns among European carmakers about potential competition from more affordable Chinese EVs.
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However, for companies like ZF Friedrichshafen (ZF), the situation presents opportunities rather than challenges. ZF, which has approximately 40 locations in China, generated roughly 20% of its global sales from China in 2020, with about 40% of its China revenue originating from Chinese automakers.
ZF CEO Holger Klein revealed ongoing discussions with Chinese customers regarding plans to establish plants in Europe, underscoring their commitment to the European market.
At a recent Leapmotor event during the Munich car show, which celebrated major suppliers under the theme “Leap Together,” the names of ZF and Continental were prominently featured on stage. Continental CEO Nikolai Setzer expressed his belief that Chinese automakers are poised for global expansion, including building plants in Europe.
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Setzer emphasized Continental’s capacity to meet vehicle standards globally, positioning the company as a valuable partner for Chinese manufacturers’ European expansion plans. He noted their readiness to handle increased volumes from Chinese customers in Europe without the necessity of constructing new manufacturing facilities.
As the competition in the European EV market intensifies, these German auto suppliers appear well-prepared to support the ambitions of Chinese EV manufacturers looking to make their mark on the continent.
