Traditional German auto manufacturers struggle in the realm of electric vehicles
Hey there! Let's discuss the latest in the electric vehicle (EV) industry, where Chinese automakers are dominating the scene compared to their German counterparts.
Ground Gained, Ground Lost
According to an analysis by the International Council on Clean Transportation (ICCT), Chinese brands like BYD, Volvo's parent company Geely, and MG manufacturer SAIC have overtaken German heavyweights like BMW and Mercedes in the recent Global Automaker Rating on e-mobility. The Volkswagen Group, which previously ranked high, now lags behind them.
BMW dropped from third to fifth place, Mercedes from fourth to seventh, and the VW group, which was fifth two years ago, now ranks eighth. In contrast, Chinese brands like Chang'an, Chery, and Great Wall have seen significant improvements.
Electric Revolution, European Delay
This year's assessment by the ICCT underscores European automakers missing the 2024 opportunity to lead the charge towards electrification. As global car markets move faster, export-dependent German manufacturers struggle to keep up.
Tesla and Chinese upstart BYD continue to take the lead, with BYD selling more electric vehicles worldwide than Tesla for the first time in 2024. Both have held the top spots in the past two years.
German Manufacturers' Stumbling Blocks
The ICCT evaluated 21 of the world's largest automakers based on various criteria to measure their progress towards emission-free vehicles. BMW received a point deduction due to delays in the electric ramp-up of the Mini brand. Mercedes and VW were criticized for insufficient evidence of announced battery recycling.
Niche Players and Struggling Giants
Stellantis, the parent company of Opel, Peugeot, and Fiat, made a significant jump forward, tying with German leader BMW for fifth place. US companies General Motors and Ford, as well as France's Renault, lagged behind German manufacturers, ranking 11th, 12th, and 14th, respectively. Japanese and South Korean manufacturers bring up the rear, ranked on the last six places.
A Tale of Two approaches: China vs. Europe
The success of Chinese automakers compared to their European competitors can be attributed to several factors such as a larger domestic market, strategic early investment, technological advancement, and favorable regulatory environments. On the other hand, German automakers face challenges like catching up technologically, dealing with regulatory uncertainty, and addressing supply chain and production constraints.
In essence, China's aggressive approach to electrification—driven by its massive domestic market, supportive policies, and ambitious targets—has helped Chinese manufacturers gain a significant first-mover advantage. Meanwhile, European automakers, particularly German brands, strive to bridge the technology and market gap.
[1] Source: ICCT report (2020-2022)[2] Source: Reuters (2023)[3] Source: South China Morning Post (2022)
The discussion about electric vehicles (EV) reveals a significant shift in the industry, with Chinese automakers like BYD, Volvo's parent company Geely, MG manufacturer SAIC, and others surpassing German brands such as BMW and Mercedes in the Global Automaker Rating on e-mobility. This marks a notable advancement in technology for Chinese brands, in contrast to the European delay experienced by German manufacturers. As the industry progresses, it would be beneficial for European automakers to consider expanding their vocational training programs in electric vehicle technology to bridge the technology gap and strive toward emission-free vehicles, as exemplified by the success of Chinese brands.
