China's new energy intelligent vehicle industry chain is moving towards the globalization 3.0 stage in an all-round way. EO Intelligence released the "China New Energy Intelligent Vehicle Industry Chain Globalization Strategy Research Report" to continue to track the process and trends of enterprises related to the new energy intelligent vehicle industry chain going overseas.
Author: Haonan Chen
In recent years, China's new energy intelligent vehicle industry chain globalization has become a hot topic. Under the background of rapidly rising domestic market penetration rate and increasingly fierce competition, the overseas going of related enterprises in the industry chain has become an industry consensus. With the continuous deepening of "going overseas", the corresponding overseas strategy model and focus are also quietly changing. As one of the important economic pillars, the automobile industry, with the continuous deepening of Chinese enterprises in the direction of intelligence, Chinese enterprises are expected to achieve "lane change and overtake" in the automotive field and become the "number one player" in the global new energy intelligent vehicle market.
China has the highest market share in the global new energy vehicle market, and internal and external factors combine to promote China's new energy intelligent vehicle industry chain to go overseas
In recent years, the sales volume of the world automobile market has fluctuated narrowly, and the annual sales volume of automobiles most seriously affected by the epidemic in 2020 is about 78 million, which is about 10 million less than that in 2019.
The compound annual growth rate of global new energy vehicle sales from 2019 to 2023 is about 60.9%, and the overall sales volume is rising rapidly, of which the sales of pure electric vehicles account for about 65% of the sales of new energy vehicles. Since 2020, China's new energy passenger vehicle market share has been rising, from 41% in 2020 to 67% in 2024, indicating that China's new energy passenger vehicle sales growth rate is higher than the world average, and it has become an important factor for the rapid growth of global new energy vehicle sales.
Since 2019, China's new energy vehicle exports have risen rapidly, from 254,300 in 2019 to 1.73 million in 2023. At the same time, China's overall automobile exports have also risen rapidly, from 1.24 million in 2019 to 5.22 million in 2023. 2021, 2022 and 2023 are milestone years for China's automobile industry exports. In these three years, it surpassed South Korea, Germany and Japan respectively. In 2023, China became the world's largest automobile exporter.
From January to August in 2024, the top 10 brands exported by Chinese automakers were: SAIC Motor Group, Chery Group, Great Wall Motor, Geely Group, BYD, etc. In 2024, the top 10 brands exported by China's own brand new energy vehicles were: BYD, SAIC Motor Group, Geely Group, Great Wall Motor, Chery Group, etc. BYD's new energy vehicle exports accounted for 90% of the brand's total automobile exports; SAIC Group's new energy vehicle exports accounted for 27% of the brand's total automobile exports.
EO Intelligence believes that for traditional energy vehicle export-oriented brands, while stabilizing their overseas market base, relying on their brand recognition and sales channel advantages, actively expanding the new energy vehicle market can help their performance; for new energy vehicle export-oriented brands, it is necessary to expand the market and pay attention to government policies and consumer preferences.
Enterprises in China's new energy intelligent vehicle industry chain have stored a large number of leading technologies and gradually have the voice over the world, and a number of international standards for new energy vehicles are led by China. China is in a leading position in the world of new energy electrification and intelligent technology and has been widely recognized.
With the rapid increase in sales of electric vehicles in China, the year-on-year growth rate is also slowing down, and the penetration rate of new energy vehicles has exceeded 50% in the second half of 2024. In this context, the competition among car companies in the domestic market has become increasingly fierce, and the number of new energy vehicle price reductions has increased year by year. In 2020, only 31 new energy vehicles had their prices reduced. In 2024, more than 120 new energy vehicles had their prices reduced, and the price reduction will be around 10%.
European countries have formulated more perfect and relatively faster development targets for new energy vehicles, and the performance of China's new energy vehicle market is also better than expected. For example: France plans to no longer sell cars fueled solely by gasoline and diesel in 2040; Norway has decided to ban the sale of fuel vehicles from 2025; China's goal is to achieve a new energy vehicle penetration rate of 25% by 2025. Data in recent months show that the penetration rate of new energy vehicles in the Chinese market has exceeded 50%. The target new energy vehicle penetration rate in overseas markets is significantly different from the current new energy vehicle penetration rate. There is a large room for improvement in the penetration rate in overseas markets.
Countries in South East Asia are very active in the introduction of the new energy intelligent vehicle industry chain, and some countries in Europe such as Hungary and Spain are also more active in the introduction of the relevant industry chain. However, several major countries where the United States and European traditional car companies are located are relatively negative about China's new energy intelligent vehicle industry chain going overseas. Active policies are mainly conducive to the reduction of corresponding costs for companies related to the new energy industry chain; restrictive policies force companies related to the new energy industry chain to give up the market or build factories in the local area. If relevant companies choose the latter, it will also promote the globalization of companies related to China's new energy intelligent vehicle industry chain.
Globalization of China's new energy intelligent vehicle industry chain is accelerating, and the main strategic areas going overseas are concentrated
The process of going overseas in the new energy intelligent vehicle industry chain is roughly divided into three stages: Globalization 1.0: products going overseas, enterprises mainly rely on export to go overseas, and initially establish sales channels, but at this stage brand awareness is limited; Globalization 2.0: brands and services going overseas, enterprises start to localize production, and establish overseas R&D teams, while providing pre-sales and after-sales services to build brand awareness in the local area; Globalization 3.0: enterprises have the ability to participate in the construction of international industry standards, output production management experience, and establish overseas R&D cooperation widely.
For example, Neusoft Group has entered the 3.0 stage in the overseas market, and it has many branches in overseas markets, responsible for R&D, sales and other functions. It has connected with many large international OEMs, and provides full-stack software engineering services for smart cockpit, smart driving and other fields.
The new energy intelligent vehicle industry chain is mainly divided into upstream, midstream and downstream enterprises. Upstream enterprises mainly include electric parts manufacturers, intelligent suppliers and other parts manufacturers; midstream enterprises mainly include OEMs; downstream enterprises mainly include energy service manufacturers, cloud as a service manufacturers and so forth.
The main export regions of China's new energy vehicles are Asia, Europe and South America; among them, new energy vehicles exported to Asia and Europe account for a large proportion. Since 2023, the number of new energy vehicles exported from China to South America has risen rapidly, indicating that South America is another target market for Chinese car companies. EO intelligent believes that due to the tariff restrictions on China's new energy intelligent vehicles in North America and Tesla's obvious advantages in this region, the main export regions of China's new energy intelligent vehicles in the future will still be South East Asia, Europe and Latin America. Special attention should be paid to opportunities in developing countries.
The main considerations for the choice of the overseas regions of China's new energy vehicle industry chain are: (1) the government's supportive attitude towards new energy vehicles (2) the local industrial base (3) the local new energy vehicle market competition. Different regions have different characteristics. For example, South East Asia continues to introduce industrial policies to support new energy intelligent vehicles, while the local market competition is low.
During China's new energy intelligent vehicle industry chain globalization, challenges and opportunities coexist
After rapid development in recent years, China's new energy intelligent vehicle industry chain enterprises have achieved technological overtaking and are highly competitive internationally. But at the same time, companies in the industry chain will face many challenges in the process of going overseas. EO Intelligence believes that the new energy intelligent vehicle industry chain will face challenges such as: different consumer product preferences in various regions, low awareness of Chinese car companies overseas, and insufficient overseas charging facilities that may lead to slow pace of vehicle electrification. Relevant industry chain enterprises need to plan reasonable expectations and solutions in advance to better face potential risks and challenges.
EO Intelligence believes that new energy intelligent vehicles will continue to deepen their intelligent development, which is an important technical opportunity. Intelligent development can be divided into two paths: intelligent cockpit + intelligent driving. At the same time, it is necessary to consider the iteration and integration of software and hardware in order to maximize the intelligent process of new energy intelligent vehicles. While bringing convenience to consumers, car companies will obtain corresponding value returns.
Nowadays, the new energy intelligent vehicle industry chain is in a stage of rapid development. For example, vehicle manufacturers have established large-scale CKD factories in South East Asia and Latin America; power battery manufacturers have established factories in Germany, Hungary and other countries. Vehicle manufacturers are currently leading the trend of upstream parts companies and downstream charging infrastructure companies going overseas. Companies related to the new energy intelligent vehicle industry chain not only need to cooperate to go overseas, but also need to try to achieve ecological going overseas in the process of expanding overseas markets.
There are significant opportunities for the new energy intelligent vehicle industry chain to go overseas. From a regional perspective: Asia, the opportunity market is mainly for the countries along the Belt and Road Initiative; Europe, the opportunity market is mainly for Belgium, the United Kingdom, Spain, Germany and other countries; Latin America, the opportunity market is mainly for Mexico, Brazil, Chile and other countries. The common points of the above opportunity markets are that the acceptance of new energy vehicles is high, and the government actively promotes energy transformation; the market of new energy vehicles is large, and the current penetration rate of new energy vehicles is acceptable.
Asia and Latin America are the regions with a high market share of Japanese and Korean automakers. In the context of the continuous erosion of the market share of overseas OEMs in China by Chinese independent brands, Japanese and Korean companies are also facing the frontal competition between the Asian market and the Latin America market. This year, the financial reports of various automakers have begun to emerge. EO Intelligence believes that the direction of China's new energy intelligent vehicle industry chain going overseas is relatively clear, and related companies can quickly expand the market. Revenue growth sources are mainly from two aspects: (1) the increase in penetration rate: rapidly promote the target market from traditional energy vehicles to new energy intelligent vehicles (2) the increase in market share: China industry chain enterprises with their own technical and cost advantages, squeeze the market share of overseas car companies.
Conclusion
The new energy intelligent vehicle industry chain going overseas is a definite trend, with both its own "subjective" reasons and passive reasons. Going overseas can indeed find new profit growth points for car companies, truly making China's new energy intelligent vehicles "international". It is still necessary to note that when entering the new energy vehicle market in individual regions, it may be due to (1) the cost of using the fuel car is the same as the cost of using the new energy vehicle, or lower (2) the local consumers have stubborn inherent awareness of the car brand (3) the penetration rate of new energy vehicles is generally on the rise, but the growth rate (slope) is likely to be less than the growth rate of China's new energy vehicle penetration rate and other reasons, resulting in the speed of globalization is not as fast as expected.
From a regional perspective, the opportunities and risks of each country and region are different, and the necessary attention for China's new energy intelligent vehicle industry chain to go overseas is also different. Relatively easy and more promising regions are in South East Asia and Latin America.
(1) For North America, Tesla holds a considerable share of the new energy vehicle market, and has high brand recognition in the United States and Canada; consumers prefer to pickup trucks and large SUVs; the United States will introduce restrictive policies on new energy cars and other high-tech industries to China; therefore, it is difficult to enter the North American market.
(2) For Latin America, the overall consumption capacity is medium, the acceptance of China's new energy intelligent vehicles is high, and the overall new energy vehicle penetration rate is low, which is suitable for related enterprises in China's industrial chain to go overseas to the region.
(3) For Europe, the overall consumption level is relatively high, and it is the "stronghold" of traditional brands Volkswagen, Audi, BMW, and Mercedes-Benz. Due to the protection of traditional car companies in the region and the consideration of industrial pillars, the European market may reduce and suppress the competitiveness of Chinese related enterprises in the European region by various means. A better development path is expected to be that the European region allows related enterprises in the Chinese new energy intelligent vehicle industry chain to exchange "technology" for "market", "replicating" the path that European car companies entered the China market 40 years ago.
(4) For Asia other than China, especially South East Asia, the Middle East and India, the acceptance of Chinese brands is high, the overall new energy vehicle penetration rate is low, and there is a high demand for new energy vehicles. In particular, South East Asia has sufficient incentives to introduce the entire car manufacturing industry chain to support local economic development and employment. However, it is necessary to pay attention to the potential investment risks of operating in India. This article does not systematically analyze the situation and opportunities of the new energy intelligent vehicle market in Oceania and Africa. The main reason is that the sales of automobiles in two continents account for a small proportion of the global market in total.
For more information on the report, please refer to the "China New Energy Intelligent Vehicle Industry Chain Globalization Strategy Research Report". If you have any questions, please contact the author of the report, Haonan Chen, email: chenhaonan@iyiou.com. Report link: https://www.iyiou.com/research/202412201428