China targets more European sales with 5-star EVs
SOLIHULL, England (Reuters) — Chinese electric vehicle (EV) makers have set their sights on winning over European drivers and large corporate customers with more affordable cars that come with top safety ratings and lots of high-tech features.
In the last few months, several Chinese EVs have received five-star European New Car Assessment Program (NCAP) ratings — an achievement that requires loading vehicles with active and passive safety features that go well beyond legal requirements. More are coming.
“All Chinese EV makers want to achieve Euro NCAP five-star ratings in order to be more competitive in the European market,” said Brian Gu, president of Chinese EV maker Xpeng.
Gu said Xpeng has spent the last three years building stores and service centres in Denmark, the Netherlands, Norway and Sweden - with some initial sales in Norway - before an official launch next year of its electric P7 sedan and G9 sports-utility vehicle (SUV) in the four countries.
Chinese EV makers have recognised that safety plays an incredibly important part of the sales process, said Matthew Avery, director at Thatcham Research, a British car research centre funded by insurers and a Euro NCAP board member.
Five-star Euro NCAP ratings are seen as key to overcoming residual European concerns over the quality of Chinese-made cars, after awful crash test failures in 2006 and 2007 created an impression that cars from China were unsafe.
Perhaps more importantly for sales, high safety ratings also open up the potentially huge corporate car fleet market for Chinese EV makers.
Fleet sales make up about half of all car sales in major markets including Germany, France and the United Kingdom, and many corporate buyers put a premium on safety.
“Fleet sales are very important and a lot of fleets have a mandatory fivestar rating for buying cars,” Avery said.
Car rental companies
What’s more, many fleets want to switch to EVs fast to meet sustainability goals. But corporate fleets have struggled to get enough EVs in Europe as supply chain issues have pushed waiting times for some models to more than 12 months.
High demand for electric cars amid supply chain shortages has allowed European carmakers to raise EV prices and focus more on retail clients, rather than customers such as car rental firms that have traditionally been less profitable for them.
That has created a window of opportunity for Chinese EV makers that have already stolen a march on most foreign rivals in China, by far the world’s biggest market for EVs.
In October, for instance, German car rental company Sixt said it would buy about 100,000 EVs from BYD, starting with its Atto 3 SUV which received the coveted Euro NCAP five-star rating the same month.