Home > News > Industry News
The SWOT Analysis of China's New Energy Vehicle Enterprises Going Aboard
Time: 2023-09-21 views: 238 Keywords:diecasting mold hpdc mold trim die die casting tool

Benefiting from policy support and technology optimization, China's automobile exports have grown rapidly. In recent years, China's brand automobile enterprises have accelerated their overseas market layout, accelerating their market development through overseas factories, joint overseas sales channels, and independent construction of overseas sales channels.


The SWOT Analysis of China's New Energy Vehicle Enterprises Going Aboard


Due to the impact of the world epidemic and Tesla's domestic production, China's automobile export has achieved a huge sales breakthrough since 2020. In 2022, China exported 2.67 million passenger vehicles, with a year-on-year growth of 62.91%, exceeding the export volume of Germany. The main reason is the lack of overseas supply under the international epidemic and the Russia and Ukraine crisis, and the export competitiveness of Chinese car companies was greatly enhanced. From January to July in 2023, China exported 2.32 million passenger vehicles, up 86.13% year on year, The export volume surpassed Japan, and China became the world's largest automobile exporter.

Among them, the improvement of China's new energy vehicle export competitiveness has brought significant incremental exports. It is expected that there is still huge room for future development of China's electric vehicle  exports as long as there is stable market demand internationally. We have conducted the following SWOT analysis on the future trends of Chinese new energy vehicle companies expanding their businesses overseas:

Strengths in Expanding Business Overseas


From 2021 to early 2022, China's automobile exports to developed markets in Europe have achieved significant breakthroughs, with new energy vehicles being the core growth point of China's automobile exports. As China's new energy vehicle industry gradually iterates and upgrades, more and more automobile companies have begun to explore markets in developed regions like Europe and America, changing the passive situation of relying on some poor or non-standard countries in Asia and Africa for automobile exports.


In 2020, China exported 224,000 new energy vehicles to overseas markets, showing good performance. In 2021, China exported 590,000 new energy vehicles overseas, continuing to strengthen. In 2022, China's cumulative export of new energy vehicles reached 1.12 million units. From January to July in 2023, China exported 940,000 new energy vehicles overseas, up 96% year-on-year. Among them, 900,000 new energy passenger cars were exported, up 105% year-on-year, accounting for 96% of new energy vehicles exported from China.


Currently, China's new energy vehicles are mainly exported to markets in Western and Southeastern Europe, including Belgium, Spain, Slovenia, and the UK. In recent years, these markets have become export hotspots. In addition, China has also exported strongly to Southeast Asian countries such as Thailand. Domestic brands like SAIC Motor and BYD have shown strong performance in their new energy vehicle models.

Disadvantages in Expanding Business Overseas


The trade barriers imposed by the US IRA Act and the new European Battery Act will pose obstacles to the overseas expansion of China's new energy vehicle companies for a relatively long period of time. It will take a long time of production practice and communication to overcome various unknown difficulties. In addition, overseas requirements for various technical indicators of new energy vehicles are quite different from mature products domestically, and the product verification and road testing cycle is long. Except for joint venture brands such as Geely Volvo and SAIC MG, China's new energy vehicle companies have weaker brand effects overseas and lower brand added value. If they plan to achieve high profits in overseas markets, it will take even more time to educate local consumers.

Opportunities in Expanding Business Overseas


The certainty of carbon neutrality policies promoting the comprehensive transformation of the global automobile industry to new energy is high, and there is still room for improvement in the electric vehicle penetration rates in developed regions like Europe and the United States. Additionally, the transformation speed of traditional automobile giants in these regions is lower than expected, and currently, Chinese new energy vehicle companies have significant technological advantages.


Moreover, for less developed regions such as Southeast Asia, China's new energy vehicles have long been invested and locally produced to obtain certain cost and tax advantages. Taking advantage of the high cost-effectiveness of vehicles to seize the market can help build brand images and cultivate local consumer car buying habits.

Challenges in Expanding Business Overseas


Compared to the domestic market, there are certain differences in the preferences of overseas new energy vehicle (NEV) consumers when choosing NEV models. In China, the NEV market is mainly composed of passenger cars, with most available models being small passenger cars or SUVs. According to a 2022 statistic from Statistia, there is a demand for heavy-duty vehicles (such as trucks and vans) in Europe and the United States, accounting for over 20%. Especially in the United States, the demand for heavy-duty vehicles is 22%, exceeding the demand for small passenger cars (18%). Therefore, there is still a certain gap in the product matrix of China's NEV companies, and the development cycle for new models is relatively long. Multiple factors such as powertrain design, vehicle transformation, and component upgrades can easily lead to significant uncertainties in successfully developing new products.

In summary, the prospects for Chinese new energy vehicle companies export boom. With the continuous improvement of technology, China’s new energy vehicles are gradually gaining competitiveness in the global market, and their expansion into overseas markets is also accelerating. In the future, China’s new energy vehicle companies will continue to leverage their technological, manufacturing, and cost advantages to expand into international markets and accelerate their globalization efforts. At the same time, with the increasing popularity of the global green and environmental protection concept, new energy vehicles will become the dominant of future travel, providing China’s new energy vehicle companies with even broader development space. Additionally, the government is actively promoting the development of the new energy vehicle industry and encouraging companies to strengthen international cooperation and expand into overseas markets. It is foreseeable that the expansion of China’s new energy vehicle companies into overseas markets will become an important trend in future development.



Source: Great Wall Securities, Future Think Tank network

E-mail
info@precisioner.com
erweima
tel
+(86)-0755-2344 8600