The electric vehicle revolution is undeniably underway, but it’s no cakewalk, even for German automakers who once led the automotive world in design and cutting-edge tech. The IAA motor show kicked off in Munich, shifting the spotlight away from Mercedes Benz and Porsche to Tesla Inc, which is unveiling an enhanced version of its top-selling Model 3. Also in focus are China’s all-electric brands, notably BYD Company Limited, Tesla’s prominent rival, showcasing six models, and XPeng Inc, preparing to expand further into European markets next year.
Tesla’s Strategy to Widen Its Market Appeal and Expand European Presence
Tesla, known for unveiling its vehicles at standalone events, made a rare appearance at the show to introduce an improved Model 3 with extended range. This Model 3 will be shipped from Tesla’s Shanghai facility to Europe in October. While Tesla has secured the top two spots in European EV sales with its Model Y and Model 3, it still faces the challenge of breaking into the sub-$30,000 EV market segment.
European Automakers Showcase Their Innovations
Bayerische Motoren Werke Aktiengesellschaft (BMW) took the opportunity to unveil its Vision Neue Klasse concept, a cornerstone of its new EV series set for a 2025 launch. This series will include sedans and SUVs equipped with a new cylindrical in-car battery, offering a 30% increase in range and a 30% reduction in charging time compared to existing models.
Mercedes-Benz Group presented a coupe-style EV, the CLA concept car, boasting a car body tailored exclusively for small and midsize EVs. The Mercedes Benz EV promises a cruising range of over 750 kilometers, surpassing many competitors.
Volkswagen AG (VW) CEO Oliver Blume shared the automaker’s ambition to halve battery cell costs through its partnerships in China.
BYD’s European Aspirations
BYD, while having sold only 1,900 vehicles in Western Europe in July, is aggressively expanding its eco-friendly EV lineup in Europe. During the show, it unveiled the new sedan and SUV Seal U, along with an impressive lineup of six EVs. Notably, BYD became the first automaker globally to deliver five million fully electric or hybrid plug-in vehicles.
XPeng Eyes European Expansion with Volkswagen’s Backing
Start-ups like XPeng still need to attain the scale, branding, and investments of German automakers to stay competitive. However, XPeng plans to expand its European presence next year, targeting Germany, Britain, and France. Thanks to a recent partnership with Volkswagen, which acquired nearly a 5 percent stake in the EV startup and invested $700 million, XPeng now has the resources and a European ally to fuel its ambitions.
China’s Impact on Europe
In a pre-show open letter, Europe’s chief car lobbyist at the ACEA association, Sigrid de Vries, noted that China’s arrival in Europe’s EV market could fundamentally transform European industries. Automotive analyst Matthias Schmidt cautioned European automakers about the risk of falling behind in the EV race, emphasizing that “If Paris wasn’t a wake-up call, Munich certainly is.” While “Made in Germany” has been a hallmark of automotive excellence for decades, the Munich Auto Show underscored China’s burgeoning strength in the EV sector.