Munich Auto Show Highlights China's EV Strength

The EV boom is as real as it gets, but it is by no means an easy road, not even for German automakers who were once behind the automotive industry's best design and cutting-edge technology. On Monday, the IAA motor show kicked off in Munich, but rather than the sound of Mercedes Benz Group AG MBGAF cutting-edge engines and sleek visual silhouettes of  Porsche Automobil Holding SE POAHY, the spotlight will be on Tesla Inc TSLA that is unveiling an improved version of its best-selling Model 3 and China's all-electric brands, including the biggest Tesla rival, BYD Company Limited BYDDY, that is exhibiting six models and XPeng Inc XPEV that is planning to expand into more European markets next year.

Tesla Aims To Broaden Its Appeal And Expand Its Markets

Tesla usually provides information about its new vehicles at its own events, but it now chose to make an appearance at the show for the first time in a decade to unveil an improved version of its Model 3 with an extended cruising range that will be exported from its Shanghai facility to Europe in October. Tesla might have won the first two places at European EV sales with its Model Y and Model 3, but it still needs to crack the EV market below $30,000. 

European Automakers

Bayerische Motoren Werke Aktiengesellschaft BMWYY came to its hometown show with an exclusive on its Vision Neue Klasse concept. On Saturday, BMW unveiled a concept car for its new EV series that has been named as “new class”, with its launch scheduled for 2025. BMW announced six models that include sedans and SUVs, equipped with a new cylindrical in-car battery, a 30% longer cruising range along with 30% shorter recharging time compared to its existing models.

Mercedes-Benz Group revealed a coupe-style EV, CLA concept car. This is the first model to be equipped with a car body exclusively developed for small and midsize EVs. This Mercedes Benz EV will come with a cruising range of more than 750 kilometers which will exceed many competing models on the market. 

Volkswagen AG VWAGY CEO Oliver Blume revealed to reports that through the automaker’s partnerships in China, Volkswagen aims to halve battery cell costs.

BYD Is Going After Europe

BYD might have sold just 1,900 vehicles across Western Europe in July, but it is going full speed ahead in bringing its tech eco-friendly EVs to Europe. It already dethroned Volkswagen in China as a best-selling brand. During the show, it unveiled a new sedan and sport utility vehicle, SUV Seal U while bringing an impressive lineup of 6 strong EVs. Last month, Michael Shu, managing director of BYD Europe said that BYD became the first automaker in the world to deliver five million fully electric or hybrid plug-in vehicles.

XPeng Is Coming After Europe Too, With The Help Of Volkswagen

Start-ups like Xpeng still need to reach German automakers' scale, branding and investments to lower costs in order to survive in an increasingly competitive market. But XPeng is planning to expand its European footprint next year, with Germany, Britain and France. Through its recent partnership with Volkswagen who acquired a nearly 5 percent stake in the EV startup and invested $700 million, XPeng gained the ‘fuel’ and a European supporter it needs. 

China Has Its Eyes Set On Europe 

In a pre-show open letter, Europe's chief car lobbyist at the ACEA association, Sigrid de Vries, wrote that China’s EV arrival to Europe has the potential fundamentally change the face of Europe’s industries as we know it,". Matthias Schmidt, an automotive analyst, warned European automakers of being at a risk of falling short in the EV race, saying that “If Paris wasn’t a wake-up call, Munich certainly is,”. For decades, the phrase “Made in Germany” was the gold standard of the automotive industry, but the Munich Auto Show highlighted China’s strength on the EV front. 

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