Chinese electric vehicles: Drag or driver for global markets?

Investment Rating - The report does not explicitly state an investment rating for the industry but emphasizes the growth potential of Chinese OEMs in the global electric vehicle (EV) market. Core Insights - The Chinese passenger vehicle market has been the largest globally since 2009, with a CAGR of 7%, reaching 26 million vehicles sold in 2023. EVs accounted for 35% of passenger vehicle sales in 2023, and this share is expected to grow significantly in the coming years [5][21][22]. - Chinese OEMs are expected to experience faster sales growth than the overall market in all global regions by 2030, particularly in Europe (+14% annually) and Southeast Asia (+15% annually) [5][33]. - The internationalization of Chinese OEMs is driven by political and economic factors, including electrification goals and the leveling off of the Chinese economy, prompting a focus on export activities [3][25]. Summary by Sections 1. China's Passenger Vehicle Industry - China became the largest passenger vehicle market in 2009, with 27 million vehicles sold in 2023, including both internal combustion engine (ICE) and EVs [20][21]. - EV sales have surged, with hybrid vehicle sales increasing by 360% and battery electric vehicle (BEV) sales rising by 129% since 2021 [21][22]. - By 2025, it is projected that every second new car in China will be either full electric or hybrid, with EVs expected to capture around 70% market share by 2030 [22]. 2. Global Perspectives on Chinese OEMs - A survey of over 15,000 respondents revealed that 58% of potential buyers consider a Chinese EV a viable option, with interest levels varying significantly by region [48][49]. - In Southeast Asia, interest in Chinese EVs is notably high at 73%, while in Europe and North America, interest is lower at 41% and 32%, respectively [48][49]. 3. Recommendations for Market Players - Incumbent OEMs in Europe and North America should emphasize brand reputation and quality to compete with Chinese manufacturers [14][15]. - Chinese OEMs should focus on building a trusted dealer network and adapting their go-to-market strategies to meet diverse customer needs across different regions [16][17]. - Distributors and dealer groups are encouraged to partner with Chinese OEMs while conducting thorough due diligence to identify potential winners in the market [16][17]. 4. Categorization of Chinese OEMs - The report categorizes Chinese OEMs into three main types: EV start-ups, incumbents with a history of international joint ventures, and domestic market incumbents [6][7][8]. - EV start-ups focus on premium segments and advanced technologies, while incumbents aim for a diverse product portfolio to capture both domestic and international markets [6][7][8]. 5. Market Share Projections - Chinese OEMs are expected to capture significant market shares in various regions by 2030, with projections of 8%-10% in Europe and 6%-8% in Southeast Asia [35][36][46]. - In North America and Japan, growth is expected to be slower, with market shares remaining below 5% [37][38].