European carmakers and suppliers are facing a challenging year. Confronted with a competitive electric vehicle market already ignited by China and characterized by lower prices, European automakers must consider how much more they can demand from suppliers who have begun laying off workers to keep up with cheaper Chinese electric vehicles.
In contrast to European carmakers, who rely on external suppliers with independent fossil fuel and electricity supply chains, their Chinese counterparts are highly vertically integrated, manufacturing almost everything in-house and thereby reducing costs. This advantage allows them to undercut their European rivals.
The disparities between traditional European carmakers and Chinese companies, which are more focused on electric vehicles, will become apparent this week at the Geneva auto show, returning after a four-year hiatus due to the pandemic.
Among them, China’s SAIC Motor and BYD, two of the country’s numerous automakers, are targeting the European market.
Renault will unveil its electric R5, and MG, which has recently attracted attention in the Philippines, will introduce the M3 hybrid. Meanwhile, BYD’s Seal sedan has been shortlisted for the Car of the Year award. If it wins, this will mark the first time a Chinese model has received this honor, highlighting the growing challenge to the status of European electric vehicles.
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