Despite a slight increase in electric vehicle (EV) registrations, the market share of German automakers in China’s electric vehicle sector has continued to decline. In 2024, the combined market share of Volkswagen, Audi, BMW, Mercedes-Benz, and Porsche in China’s electric car market was just around five percent, down from 6.5 percent the previous year. The German manufacturers registered 325,637 EVs in China, marking a 2.8 percent increase compared to 2023, but this growth lags behind the overall market surge.
In contrast, China’s battery electric vehicle (BEV) registrations soared by 27 percent in 2024, reaching 6.3 million cars. The market share of German manufacturers has dropped despite the increase in their absolute EV sales, as local Chinese manufacturers continue to capture market share with aggressive pricing and innovation.
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Volkswagen was the only German automaker to show significant growth, with its ID series emerging as the best-selling electric models in partnerships with Chinese manufacturers. However, VW’s growth rate of 17 percent still trails the market’s overall performance.
Meanwhile, premium brands have seen declines: BMW’s electric sales remained almost flat, down by 1 percent, Mercedes-Benz and Audi saw drops of nearly 25 percent, and Porsche’s electric sales plummeted by over 50 percent. The Porsche Taycan, despite receiving a facelift in 2024, struggled in the market due to its high price, with only 1,845 units sold, sparking internal company changes that include discussions of early contract terminations for key executives.
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The decline in demand for German EVs is compounded by growing competition from Chinese electric carmakers, with many Chinese models now offering comparable or even superior technology at lower prices. The Xiaomi SU7, for example, has gained significant traction in China, selling at a fraction of the cost of the Taycan. “For every Taycan sold in China in 2024, Xiaomi has sold 74 SU7s,” according to the report.
The challenges extend beyond the electric segment as well. Volkswagen, for the first time in 12 years, built fewer than three million cars in China in 2024, marking a 10.2 percent decline. In contrast, Chinese automakers like BYD, Geely, Chery, and Li Auto have continued to expand their production, with BYD reaching over four million cars, and Li Auto experiencing a 33.9 percent growth in production.
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Xing Zhou, Partner at Alix Partners, pointed out that while Chinese manufacturers have not yet fully covered their costs, the ongoing market dynamics will likely result in a consolidation of players, with only a handful of manufacturers remaining competitive in the future.
Source: Handelsblatt