Europe’s automakers are showing off their latest battery-powered vehicles at the IAA Mobility car show this week as they try to challenge Tesla Inc. and fend off growing competition from China.
(Bloomberg) — Europe’s automakers are showing off their latest battery-powered vehicles at the IAA Mobility car show this week as they try to challenge Tesla Inc. and fend off growing competition from China.
The number of Chinese companies at this year’s IAA has more than doubled compared to just two years ago, as manufacturers like BYD Co. and Xpeng Inc. are pushing into Europe to escape a fierce price war and decelerating economy.
Bloomberg News is speaking with executives from Volkswagen AG, Mercedes-Benz Group AG, BMW AG, Renault SA and several of their Chinese rivals, as well as suppliers Robert Bosch GmbH and Continental AG, about these topics and more.
Key Stories:
- China crashes Germany’s least-German car show in history
- BMW gets help from China to electrify the Mini Cooper
- BMW unveils next-generation EV; CEO says they’ll generate more profit
- Mercedes bets on range to take on Tesla’s EV leadership
- VW moves to improve design as EV sales flag in China
Renault CEO to Continue Drumming Up IPO Support (5:20 p.m.)
Renault CEO Luca de Meo will resume talks with potential investors for the company’s planned listing of its EV business, after holding some 35 meetings before the summer with “very positive feedback,” he said in an interview.
The initial public offering of Ampere “is an industry-motivated project with a lot of substance, plants that are already running, platforms, investment behind us, a dealer network,” the CEO said.
The separate listing will help create a distinctive corporate culture for Ampere, with its own management team and its own board of directors, bolstering the entity’s transparency and performance, de Meo said. The carveout will allow Ampere to reduce costs by as much as 40% in the next generation of EVs over time to help Renault better fight Chinese competition.
Protesters Abseil, Sink Car Parts Near Show Venue (4:55 p.m)
A range of activist groups have planned protests around the IAA. Some members of green group Extinction Rebellion abseiled from a highway bridge over one of Munich’s main traffic arteries on Monday, while members of Greenpeace submerged parts of a car chassis into a shallow artificial lake in front of the exhibition center.
Chancellor Olaf Scholz may become the target for more disruption when he officially opens the show to the public on Tuesday.
Magna May Produce For China’s Carmakers in Europe (3:00 p.m.)
Magna International Inc. is in talks to produce vehicles for Chinese brands in Europe as they expand in the region. Its factory in Graz, Austria has some spare output capacity, according to Magna Europe President Uwe Geissinger.
“Whether we make them in Graz or a new facility depends on how the talks turn out,” he said in an interview.
The Austrian-Canadian parts maker and contract manufacturer has been churning out cars for the Chinese market for Beijing Automotive Group Co. at a joint-venture facility in the Asian country, but will tread carefully when it comes to future partnerships.
“We are closely studying the financial standing of any new production partner,” Geissinger said. “Many Chinese automakers we don’t expect to survive — maybe one in ten will.”
Xpeng Maps Out Expansion to Germany, UK (1:15 p.m.)
China’s Xpeng plans to start sales in the UK and Germany next year, with the company offering models including its P7 sedan and G9 sport utility vehicle to customers in Europe’s biggest economy.
In Germany, the carmaker plans to sell via a traditional dealership approach and is in talks with several larger chains, country chief Markus Schrick said. Xpeng hopes to line up 15 to 20 distribution partners this year and twice that next year. It would compete with Volkswagen, which is investing $700 million in Xpeng to jointly develop EVs in China.
While Xpeng is also considering expansion to South America and the Middle East, North American markets aren’t on the agenda because of the current political situation, according to co-president Brian Gu.
BYD Shows Off Electric Sedan to Challenge Tesla’s Model 3 (12:10 p.m.)
China’s best-selling carmaker BYD showed off its new electric offerings for the European market, including the Seal U compact sport utility vehicle and the Seal sedan. The latter will start from €44,900 ($48,470) in Germany, putting it in direct competition with Tesla’s Model 3 and several of Volkswagen’s cars.
BYD’s design chief Wolfgang Egger, a German native who previously worked for Alfa Romeo, Seat and Audi, said he took inspiration from the ocean for the Seal’s design, pointing out its flowing lines.
BYD has expanded to 15 markets in Europe. Its Atto 3 crossover SUV was the best-selling EV in Sweden in July.
VW Sees EV Price Parity Some Years Away (11:30 a.m.)
The price of VW’s electric cars won’t reach parity with the company’s combustion-engine siblings until the end of the decade, CEO Oliver Blume told reporters. That’s when Europe’s biggest carmaker will produce vehicles from its new EV underpinnings that will add cost-saving scale.
“We want to reach a better price position, but also a better profit position” on EVs, and “our product offering is the decisive factor,” Blume said.
Chinese manufacturers are expected to offer models in Europe at around double the price they’re selling for in their home market, he said.
Continental Taps Google Cloud AI Tech For Cars (10:15 a.m.)
Continental is equipping auto dashboards with Google’s generative artificial-intelligence technology, enabling drivers to chat with their cars.
The German auto-parts maker will integrate the technology into its existing high-performance cockpit computer. Drivers can quiz the AI on a range of topics, from finding the correct tire pressure to more information on highlights along their route. The system answers in real time.
Continental expects the solution to be ready for production in 18 months. By the end of next year, some 30 different cars will be equipped with the high-performance cockpit computers, the supplier said.
Renault’s de Meo Wants to Avoid Price War (9:40 a.m.)
Renault SA CEO Luca de Meo said it’s “important to avoid a price battle in the short term” as European carmakers come under pressure from cuts by Tesla and Chinese manufacturers.
Renault is still planning to list its EV and software arm Ampere next year, which will allow the company to create a “pure EV player” that can help slash the cost of electric vehicles over time. EVs are “not a mature technology yet,” de Meo told Bloomberg Television in an interview.
While the European auto market is “pretty soft” right now, Renault’s plans to unveil a new product each month next year should help the carmaker weather the difficult environment, de Meo said.
VW’s Blume Sees China Comeback (9:10 a.m.)
Volkswagen CEO Oliver Blume sees China’s economy rebounding from its current struggles and is positioning the carmaker to quickly bring new products to market when it does.
“In China, the market development is not as strong as we expected a year ago, but I’m very optimistic that the Chinese market will have a comeback,” Blume said in an interview with Bloomberg Television. “It’s important to prepare ourselves to be there.”
Blume expects VW’s new partnership with Xpeng to reap results quickly in bringing new and more tailored products to Chinese customers, as VW seeks to turn around declining EV sales in China.
VW continues to focus on its unified cell and battery production, a key plank in gaining a competitive edge through the company’s huge scale. Blume said VW expects to use its unified cell in about 80% of its electric cars in the future.
–With assistance from Oliver Crook, Albertina Torsoli, Monica Raymunt, William Wilkes, Wilfried Eckl-Dorna and Stefan Nicola.
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