According to Christian Kames, managing director at financial advisory firm Lazard, Chinese electric vehicles are posing a significant threat to the European car industry. Kames made this statement at the IAA Mobility Conference in Munich, where the number of Chinese companies participating has increased drastically compared to previous events.

IAA Mobility reported that around 40% of the presenters at the conference are from Asia, with the number of Chinese exhibitors more than doubling from 29 in 2021 to 75 this year. This surge in Chinese companies demonstrates their ambition to conquer the European market.

Chinese automakers have emphasized the importance of Europe in their global expansion plans. This aligns with Kames’ observation that Chinese firms view Europe as the next market they want to conquer.

Several Chinese car manufacturers have announced their plans to enter the European market. BYD, backed by Warren Buffet, recently launched its Seal electric sedan in Europe, while Leapmotor and Xpeng have also expressed their intentions to sell their electric vehicles in Europe.

Xpeng, for instance, has already entered the Norwegian, Swedish, Danish, and Dutch markets and plans to sell its cars in Germany by 2024. Brian Gu, the president of Xpeng, highlighted the significance of the German market for all carmakers.

Swiss bank UBS even downgraded two major European automakers due to the increasing threat posed by China’s expanding electric vehicle market.

European car manufacturers are well aware of the competition brought about by Chinese companies, according to Christian Kames. He stated that European carmakers now understand that Chinese automakers pose a real threat. The question now is how they will respond to this challenge.

Kames added that he doesn’t believe European carmakers underestimate the Chinese anymore.

Renault CEO Luca De Meo emphasized the importance of investing in new technologies, particularly in the company’s dedicated electric vehicle unit, Ampere. De Meo believes that this investment puts Renault in a strong position to compete internationally.

De Meo stated that Chinese original equipment manufacturers (OEMs) started a generation ahead of their European counterparts due to different market conditions in China. However, Renault is prepared to engage in the fight and cut costs to remain competitive.

China’s advancements in Europe’s electric vehicle market can also provide valuable lessons for European countries looking to enter the Asian market. Chris Reitermann, CEO of Ogilvy Asia Pacific and Greater China, highlighted the need for multinational companies to adapt quickly to the shift to electric vehicles.

Reitermann mentioned that many multinational players underestimated the speed of this shift in China. He also noted that some big car companies are now realizing they cannot succeed in China alone. As a result, partnerships between local Chinese EV manufacturers and multinational companies, like Volkswagen partnering with Xpeng, are becoming more common.