Legacy automakers, suppliers in Europe are struggling as demand for Chinese EVs rise
Major European carmakers and their suppliers are struggling as Chinese EV makers like BYD are gaining ground and are on the rise in the continent. Suppliers to carmakers in particular are in a tough spot as Asian suppliers are enjoying higher margins, and more volume
China’s BYD, surpassing Tesla in global electric vehicle (EV) sales, is causing a ripple effect in the automotive industry, leaving German auto suppliers uneasy.
Several auto parts supplying companies, like Schaeffler and Continental, which have long thrived alongside German automakers like Volkswagen, BMW, and Mercedes-Benz, are now finding themselves challenged by the rise of Chinese EV manufacturers.
As BYD and other Chinese EV makers expand their global presence, German suppliers face increased competition in a sector they once comfortably dominated.
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The transition to electric vehicles has disrupted the traditional advantages these German suppliers enjoyed for decades. Newer suppliers in Asia, focusing on batteries, software, and semiconductors, now enjoy higher margins, and more importantly, more volume.
German suppliers are grappling with the need to invest in EV technology while maintaining their market position in traditional cars.
To address these challenges, Schaeffler took the unconventional step of bidding to acquire Vitesco Technologies in October. Vitesco Technologies stood out among German suppliers for its early commitment to EVs, making it an attractive takeover target today.
China’s rising automakers primarily rely on Chinese suppliers, posing a dilemma for German suppliers, which have a significant presence in China but mainly serve the major German automakers.
Elon Musk’s recent praise for Chinese automakers and his prediction of their dominance in the global automotive industry signal a shift in the landscape.
A report by Allianz Trade highlighted China’s EV makers as a significant threat to European carmakers, particularly in Germany, Slovakia, and the Czech Republic. The report called for higher tariffs on Chinese EVs, estimating potential losses of 7 billion euros per year for European carmakers by 2030.
As the European Union investigates whether Chinese EV makers benefit from unfair advantages due to government subsidies, German auto suppliers face an evolving industry. The expansion of Chinese EV makers intensifies competition in auto parts, prompting German suppliers to adapt to the changing dynamics.
ZF management board member Stephan von Schuckmann emphasizes the need to take the competition from China seriously and adapt to survive, acknowledging the likely impact on Europe’s carmakers and their suppliers.
Major European carmakers and their suppliers are struggling as Chinese EV makers like BYD are gaining ground and are on the rise in the continent. Suppliers to carmakers in particular are in a tough spot as Asian suppliers are enjoying higher margins, and more volume
China’s BYD, surpassing Tesla in global electric vehicle (EV) sales, is causing a ripple effect in the automotive industry, leaving German auto suppliers uneasy.
Several auto parts supplying companies, like Schaeffler and Continental, which have long thrived alongside German automakers like Volkswagen, BMW, and Mercedes-Benz, are now finding themselves challenged by the rise of Chinese EV manufacturers.
As BYD and other Chinese EV makers expand their global presence, German suppliers face increased competition in a sector they once comfortably dominated.
Related Articles
Spurned by India, Chinese EV maker BYD plans to make it big in Japan, gets aggressive with their strategy
Hundreds protest against Tesla for selling China-made models cheaper
The transition to electric vehicles has disrupted the traditional advantages these German suppliers enjoyed for decades. Newer suppliers in Asia, focusing on batteries, software, and semiconductors, now enjoy higher margins, and more importantly, more volume.
German suppliers are grappling with the need to invest in EV technology while maintaining their market position in traditional cars.
To address these challenges, Schaeffler took the unconventional step of bidding to acquire Vitesco Technologies in October. Vitesco Technologies stood out among German suppliers for its early commitment to EVs, making it an attractive takeover target today.
China’s rising automakers primarily rely on Chinese suppliers, posing a dilemma for German suppliers, which have a significant presence in China but mainly serve the major German automakers.
Elon Musk’s recent praise for Chinese automakers and his prediction of their dominance in the global automotive industry signal a shift in the landscape.
A report by Allianz Trade highlighted China’s EV makers as a significant threat to European carmakers, particularly in Germany, Slovakia, and the Czech Republic. The report called for higher tariffs on Chinese EVs, estimating potential losses of 7 billion euros per year for European carmakers by 2030.
As the European Union investigates whether Chinese EV makers benefit from unfair advantages due to government subsidies, German auto suppliers face an evolving industry. The expansion of Chinese EV makers intensifies competition in auto parts, prompting German suppliers to adapt to the changing dynamics.
ZF management board member Stephan von Schuckmann emphasizes the need to take the competition from China seriously and adapt to survive, acknowledging the likely impact on Europe’s carmakers and their suppliers.
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