The 2024 sales figures for German manufacturers in China show widespread disaffection with their electric vehicles. You will find the latest figures and my situation analysis in this article.
German manufacturers had made China their Eldorado. It has become their hell. Their electric cars are selling with increasing difficulty. Their market share has eroded from 6.5% in 2023 to 5% in 2024. In this article, we share the latest figures and analyze the reasons for the Chinese consumer’s disaffection.
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Key figures for the electric car market in China in 2024
- 27%: growth in the Chinese electric vehicle market in 2024
- 6.3 million electric car registrations in 2024 in China
- 5%: market share of electric cars by German brands (Volkswagen, Audi, BMW, Mercedes, and Porsche) in 2024, down in 2023 (6.5%).
- 2.8%: volume increase in registrations by German brands (325,637 units)
- -50%: decline in sales of Porsche electric vehicles
- 1,845: the number of Porsche Taycans sold in China in 2024
- -25%: decline in sales of Mercedes and Audi electric vehicles in 2024
- -1%: decline in sales of electric vehicles sold by BMW
- +17%: growth in Volkswagen electric car sales
- Volkswagen production in China fell below 3 million vehicles for the first time in 12 years (-10%).
- +41%: increase in production by BYD, the Chinese market leader, to 4.3 million vehicles by 2024.
- +94%: growth in the PHEV (plug-in hybrid) market, a segment neglected by German brands.
The market share of German electric cars in China has fallen further. By 2024, they will account for just 5%. German manufacturers nevertheless sold 2.8% more electric vehicles in China in 2024. But this was in a global market that grew by 27%. German manufacturers’ sales are growing 10 times slower than the overall market. Their market share is, therefore, mechanically declining.
For every Taycan sold by Porsche in China, Xiaomi sells 74 units of its SU7.
Positioning, the source of German brands’ woes in China
The main reason for the German manufacturers’ decline in electric vehicles is their marketing positioning.
Regarding combustion-powered cars, German manufacturers still enjoy a certain aura. High-end Porsche, BMW, Mercedes, or Audi models are still perceived as status symbols. Manufacturing combustion-powered cars is complicated, and Chinese consumers still perceive German brands as being of the highest quality.
The same cannot be said of electric cars. The technological baggage and expertise required to manufacture them make them accessible to many start-ups. Even phone manufacturers like Xiaomi are diversifying into the manufacture of electric cars.
As a result, manufacturers such as BYD, Li Auto, and Chery offer more attractive models that are often better adapted to local market expectations. One example is particularly telling. While the Porsche Taycan sells for €123,000 or more, Xiaomi offers the SU7 (see video above), a sporty sedan similar in every respect, for just €30,000. The result is clear: Xiaomi sells 74 SU7s for every Taycan.
This is not an isolated example. Here are the sales figures for a few other electric models from German brands:
- Mercedes EQS: 15 units sold in 2024
- BMW i7: 2,267 sold in 2024
- Audi Q4 e-tron: 16,000 units sold in 2024
If you think 16,000 units of the Q4 e-tron is a good score for the Chinese market, remember that BYD sold 273,000 Yuan Plus, a rival model.
3 strategic areas to review
As you will have gathered, one of the major problems facing German manufacturers is their pricing policy and approach to the market. The premium electric car segment does not yet really exist in China. This means offering less expensive models.
What is more, there is also a problem in terms of technical orientation. In contrast to Western markets, Chinese customers demand hybrids with Range Extender (REEV), which are sorely lacking in German ranges. A brand like Li Auto sold 493,000 hybrid SUVs in 2024 (+30%) to give you another order of magnitude. By not offering this type of powertrain, German manufacturers are making a strategic error and depriving themselves of a growth driver.
Finally, the location of production is also important. Locally produced models, like the BMW iX3 and the electric i3 (reserved for China), sell better. To resist, the Germans will have to strengthen their local presence. BMW plans to produce its “Neue Klasse” in China, while Mercedes will introduce its MMA platform at the end of the year.
Is it still possible for German manufacturers to bounce back? I do not have the answer to this rhetorical question, but what is clear is that if they do nothing, their market share will shrink to nothing. To avoid going under, we urgently need to adapt our models to the expectations of Chinese consumers and offer more affordable, better-equipped models. The “German brand synonymous with quality” effect could be a lever. Launching new platforms and a more local presence will be essential for regaining ground.
What will the Chinese electric car market look like in 10 years?
The Chinese market is a continent-wide market. What awaits the Chinese electric car market is what has happened to the European internal combustion car market over the past 80 years: consolidation. There are currently 200 electric car brands in China. In 10 years, there will only be 15 to 20.
Consolidation will be accelerated compared to what we have seen with combustion-powered cars on the old continent. In 10 years, the winning brands will be known, and they will have 2 characteristics:
- Strong local market presence (as a reminder, 90% of the Chinese market is currently controlled by Chinese brands)
- Ability to export (particularly to Europe, but not exclusively).
- This ability to export is an existential threat to the European automotive market, which the politicians who voted for the “Green Deal” failed to perceive.
The Chinese threat to the European market
The strength of Chinese brands lies in their ability to manufacture simple, attractive models at low cost. We have become incapable of doing this in Europe, and this facilitates their expansion. Trade barriers in the United States make Europe more vulnerable to this invasion.
In the medium term, this will bring about several major changes:
- Chinese electric vehicles could reinvigorate the European electric car market with models that are finally affordable.
- the profit deferrals that German brands used to “subsidize” their European factories will no longer be possible and will continue to lead to job losses and closuresGerman manufacturers had made China their Eldorado. It has become their hell. Their electric cars are selling with increasing difficulty. Their market share has eroded from 6.5% in 2023 to 5% in 2024. In this article, we share the latest figures and analyze the reasons for the Chinese consumer’s disaffection.
Conclusion
These are exciting times of geopolitical and economic upheaval. What is happening in the electric vehicle market is just one example, but there are many others. In any case, B2B and B2C markets have become increasingly turbulent and unreadable, and in the future, companies will need more and more analysis to anticipate behaviors that may be.
