As new, advanced EVs take over the auto market in China, legacy automakers, including Volkswagen, General Motors, Toyota, BMW, Honda, and Mercedes Benz, will all lose significant market share, according to a new Greenpeace report.
The legacy automakers, who once dominated the market in China, are now at risk of losing their positions to domestic EV makers in the region.
Will legacy automakers lose out in China over EVs?
China, the world’s largest automaker, is rapidly progressing toward electric vehicles. According to South China Morning Post, EV deliveries made up 31% of overall car sales in the first quarter of 2023, up from 28% last year.
With China accounting for roughly two-thirds of global EV sales last year, many legacy automakers have been caught off guard.
Volkswagen, which has maintained its position in China since around the 90s, watched its overall market share dwindle by 3.6% last year with new EVs attracting Chinese buyers.
After 15 years of being on top, BYD, the largest EV maker in China, surpassed VW in passenger car sales for the first time in Q1 to become China’s best-selling brand.
Volkswagen revealed a new €1 billion (roughly $1.1 billion) investment to establish an EV development center in the region. The automaker says the new project, “100%TechCo,” will reduce development times by 30% for new EV products and tech.
Meanwhile, Toyota’s new CEO, Koji Sato, who took over in April, said after seeing the impact at the Shanghai Auto Show:
We need to increase our speed and efforts to firmly meet the customer expectations in the Chinese market.
With the market in China “rapidly progressing,” Toyota revealed it was working to develop a new EV-dedicated platform, due out in 2026, to power its next-generation electric models.
“The era of gas and diesel vehicles is coming to an end”
The new Greenpeace report shows Volkswagen is the most vulnerable and will have the largest drop in sales.
According to the report, VW will see its share fall by another 3% to 7% by 2030. The report also forecasts GM will likely lose between 3% to 6%, Honda between 2% to 4%, Toyota between 1% and 3%, and BMW and Mercedes-Benz between 0.5% and 1.5%.
Bao Hang, a Greenpeace campaigner, said in a statement:
Toyota, Volkswagen and other carmakers that have been slow to embrace electric vehicles face significant loss of market share, even under the most conservative estimates.
The report predicts roughly one-third of the production capacity for combustion-powered vehicles will sit unused by 2030, suggesting automakers need to accelerate their timelines or face a glut in the market.
Greenpeace expects Chinese automakers to build EVs better suited to consumer preferences. Several auto leaders have also echoed this idea.
Ford’s CEO said on the company’s Q1 earnings call, “It’s interesting to see how customers are no longer just attracted to traditional luxury brands with EVs or even hardware design anymore.” He continued explaining, “The best brands are offering integrated digital, retail, lifestyle, and experience that is software-defined.”
NIO, a leading EV startup in China, has a similar stance. The EV maker’s CEO, William Li (Li Bin), claimed even Tesla’s “Model 3 and Model Y are less complex in functions and configurations compared to Chinese car brands, such as BYD.”
What do you guys think? Are legacy automakers about to face a reckoning?
FTC: We use income earning auto affiliate links. More.