Chinese automotive giant Geely has revealed its intention to list a portion of its sports car brand, Lotus, in the U.S. through a merger with a firm backed by the luxury goods investment group LVMH (Louis Vuitton).
Lotus, with a manufacturing facility in China, is set to focus on producing electric SUVs. According to Peter Wells, Director of the Centre for Automotive Industry Research at Cardiff University, this move is crucial for the survival of Lotus, characterizing it as a “do or die push for survival.”
This announcement marks Geely’s latest strategic move as it aims to expand its presence in the global auto marketplace and solidify its position in the electric vehicle (EV) technology landscape. The global shift towards electrification in the automotive industry, particularly in Europe, has led to a growing market share for Chinese firms.
Wells commented on Geely’s role, stating, “Geely has been a steady steward for many of these companies, including Lotus, positioning them for the upcoming electric revolution by quietly investing substantial sums of money.”
In 2022, Chinese electric vehicles achieved a 9 percent market share in Europe, almost double the previous year, according to analysis by auto consultants Inovev. Chinese manufacturers exhibit a cost advantage, producing electric vehicles for an average of $11,000 less than their Western counterparts.
JATO Dynamics consultancy reports that the average price of an electric vehicle in Europe is 56,000 euros ($61,000), whereas Chinese groups have significantly reduced the average price of an electric vehicle in China to 32,000 euros ($35,000) by the first half of 2022.
Efficiency gains and the comparatively higher cost of battery production in Europe enable Chinese firms to compete favorably in the global market. Inovev predicts that Chinese groups could capture a fifth of Europe’s electric vehicle market by 2030.
Despite challenges related to production and affordability of electric cars, along with infrastructure concerns, the EU plans to end the sale of new petrol and diesel cars by 2035. In 2022, semiconductor shortages affected automakers, but the electric vehicle market showed resilience, reaching a record 12.1 percent share of the market in the European Union.
Looking ahead, experts anticipate a stronger future for electric vehicles, with Al Bedwell, Director of Global Powertrain at LMC Automotive, predicting a 50 percent growth in 2023 as the semiconductor supply chain stabilizes.
While Elon Musk’s Tesla remains the global leader in electric car sales, Chinese electric vehicle leader BYD is rapidly advancing, nearly tripling its sales in 2022 to 900,000 cars, with plans for further expansion in Europe and North America.
Chinese carmakers benefit from a robust domestic supply chain, including the world’s largest battery maker, CATL, providing access to innovative technologies like battery swapping and lithium iron phosphate batteries.
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