Can EREVs (extended range EVs aka REx) be a profit catalyst for Chinese NEV automakers? Potential buyers are paying more attention to the cost effectiveness of the models on offer. As we move through 2024, the price war in the Chinese vehicle market continues and the competitive pressure is intensifying. Increasingly, consumers’ car purchasing intentions have pivoted towards New Energy Vehicles (NEVs), leading traditional OEMs, who mainly focus on ICE vehicles, to significantly reduce prices in an attempt to retain their steadily declining market share. The Chinese OEMs are also reducing the prices of new energy vehicles to try to take the lead in this expanding field. According to financial reports published in the first quarter of 2024, many automotive companies are facing huge losses or a significant decline in profits, and so car companies are now looking at reducing manufacturing costs. At the same time, with the slow recovery of China’s economy, potential buyers are paying more attention to the cost-effectiveness of the models on offer. After seeing Li Auto’s great success with Extended Range Electric Vehicles (EREVs) last year, more OEMs are focusing on the EREV technology route. In terms of sales, it is obvious that all new energy vehicle segments have achieved year-on-year (YoY) growth — including MHEV (48V) — but the YoY growth of EREV is particularly impressive. As of May, this year, sales of EREV models have increased by 120% YoY.
Global domination
The global light vehicle market boasted the best results of the year so far in June, according to figures released by GlobalData. The Global Light Vehicle (LV) selling rate reached 89 million units/year in June, not only an improvement on the previous month, but the best result so far this year. With 7.6 million vehicles sold, June marked a 2.2% decline year-on-year (YoY), although year-to-date (YTD) sales were up 2.3%. Sales accelerated in China last month with the price war continuing, while in the US sales staggered as a result of a cyberattack affecting dealerships. Europe saw a rise in selling rates, thanks to improvements in both East and West Europe. Meanwhile, Japan recorded lagging sales in the face of supply issues and a subdued macroeconomic climate.
SA BEVs?
Is South Africa ready to embrace electric vehicle production? While its is not fully equipped at present, it has significant potential to develop its BEV production capabilities. Today, South Africa is recognised as the largest producer of automotive vehicles on the African continent, with the industry playing a pivotal role in economic growth, employment, and international trade. This sector has evolved into a sophisticated and highly competitive player in the global market. This article gives an overview of the current state of automotive production in South Africa, its prospects, and its challenges, with a closer look at whether it is ready to shift towards the production of Battery Electric Vehicles (BEVs). The South African automotive industry is dominated by subsidiaries of major OEMs, including BMW, Ford, Toyota, and Volkswagen. These companies have established manufacturing plants in South Africa, allowing it to become a key manufacturing hub, exporting vehicles and components to over 150 countries. South African Light Vehicle production grew by a huge 14% year-on-year (YoY) in 2023. For 2024, we envisage 5% YoY growth.
Goodwood
SAIC's MG celebrated its centenary at this year’s Goodwood Festival of Speed, combining the past and future on track and display. The opening of this year’s Festival of Speed saw the Duke of Richmond leading a unique parade of old and new MGs past Goodwood House and then up the famous hill climb, celebrating the 100-year anniversary of SAIC’s venerable MG brand. The combination of past and future continued on the MG stand where the brand’s future was showcased with the global debut unveiling of the MG Cyber GTS Concept. The concept vehicle pays homage to the MGC GTS Sebring, exploring the future of MG and for a GTS model in the EV era. Frankie Youd spoke with David Allison, head of product and planning, MG Motor UK, to learn more about the MG vehicles on display and to discuss the public’s reaction to the MG Cyber GTS concept.
And again
Lotus had an electrifying presence at this year’s Goodwood Festival of Speed, for the first time showcasing its full product line at the event. At this year’s Goodwood Festival of Speed, Geely-owned Lotus showed two UK dynamic debuts – with the highly anticipated hyper-GT Emeya, and the one-of-a-kind Evija X. Visitors at the festival were also able to see the Evija, the world’s most powerful production car (boasting a staggering 2,011bhp), take part in the ‘supercar’ category track run [unfortunately it crashed on a second run - ed]. Alongside the Lotus debuts, a full EV product range was showcased on the Lotus stand. Lotus showed the ‘looks like an SUV, drives like a Lotus’ Eletre, the fully electric hyper-GT, Emeya, Emira, and the elegantly styled Evija hypercar. Frankie Youd spoke with Simon Lane, executive director, Lotus advanced performance, and Ben Payne, chief creative officer, to discuss the Lotus presence at the event, and to learn more about the OEM’s electric future.
EVs down
Tesla new car registrations fell 24% year over year in California in the second quarter, the third consecutive time the automaker’s sales have fallen in the Golden State, according to a report by the California New Car Dealers Association cited by Bloomberg. While the Model Y remained the state’s top selling car, Tesla had seen its market share falter throughout the year. It accounted for 53.4% of California’s battery electric car market in the first half, down from 64.6% a year ago, the CNCDA report said. Overall Tesla sales in California were down 17% so far this year. “Tesla’s allure seems to be wearing off, signaling potential trouble for the direct to consumer manufacturer,” the trade group’s analysts said, according to Bloomberg.
Volvo rethinks
Volvo, whose EV30 is made in China, has lowered its automotive sales forecast for this year due to possible impacts in the wake of the EU’s trade spat with the country over EV tariffs. The Geely owned firm now sees retail sales growing 12% to 15%, from a previous projection of at least 15%, citing in its Q2 2024 report that it expects “macroeconomic and geopolitical uncertainties to remain.” It continued: “Once the EU investigation concludes later this year, following the member state votes and potential issuance of the definitive tariffs, [we] will have a final and clear overview of how tariffs will impact it.”
And rising
BYD outlined plans to aggressively expand its dealership network in Vietnam as it opens its first dealerships in the country this week, posing a formidable challenge to local rival VinFast. Thirteen BYD dealerships will open their doors to the Vietnamese public on Saturday and the automaker hoped to boost that number to about 100 by 2026, Reuters reported. An initial three model line including the compact Atto 3 crossover would increase to six from October, according to Vo Minh Luc, chief operations officer for BYD Vietnam. All BYD models for Vietnam would be imported for now. Vietnam’s government said last year BYD had decided to build a factory to manufacture electric cars in the north of the country but those plans have slowed, the company that operates the industrial park in the area said in March.
Ford pivots
A Ford plant once earmarked for a delayed three-row electric SUV will now assemble F-Series Super Duty pickups at Oakville in Ontario, Canada, starting in 2026, boosting production of one of the company’s most popular and profitable vehicles. The move to add production of up to 100,000 units of its best-selling Super Duty to Oakville expands Super Duty production across three plants in North America, including Kentucky Truck Plant and Ohio Assembly Plant, which are operating at full capacity, Ford said. “It also paves the way to bring multi-energy technology to the next generation of Super Duty trucks, giving customers more freedom of choice and supporting Ford’s electrification plans, the automaker said in a statement. Ford plans to invest US$3bn to expand Super Duty production, including $2.3 billion to install assembly and integrated stamping operations at Oakville which will become a fully flexible plant.
Hong Kong calling
Chinese battery electric vehicle (BEV) startup BeyonCa announced it had signed an agreement with a Shanghai-based subsidiary of Contemporary Amperex Technology (CATL) as it moves ahead with plans to build a BEV assembly plant in Hong Kong. Beyonca was established in 2021 with the backing of Renault Group and Chinese state-owned vehicle manufacturer Dongfeng Motor Corporation to produce up market BEVs which would compete with BMW, Mercedes-Benz and Tesla. BeyonCa also said it recently signed agreements with financial institutions such as Fengde Capital, East West Bank and GF Securities, as well as Shandong-based tech company AiTech Flsay Information Technology to help get the project under way which it describes as the first “made in Hong Kong” car brand.
Sub-brand sub-brand
VW has launched its first smart battery energy vehicle (BEV) in China, designed specifically for the local market and available under the company’s new ID. Unyx sub-brand [itself a sub-brand of ID EV]. The new ID. Unyx 01 model is a smart battery powered SUV coupe powered by an 82kWh battery pack supplied by CATL. It has a range of 621km (390 miles) on a single charge and features smart human machine interface (HMI) with a personalisable 3D avatar. VW described the model as its “latest development stage in intelligently networked vehicles, technically and visually tailored to the lifestyles of young customers in China’s cities”. It planned to open 40 exclusive outlets in 20 cities across China where prospective customers would be able to “experience the vehicle through modern technologies such as virtual and augmented reality”.
Have a nice weekend.
Graeme Roberts, Deputy Editor, Just Auto
