(Yicai Global) April 26 -- China’s new energy vehicle exports to Europe are slowing down as Chinese auto manufacturers battle Covid-19 restrictions and their European peers increase market share. This year may be their last chance to penetrate the European market, a market insider said.

The window of opportunity in the European market is closing for Chinese auto companies as their European peers jack up output and slow delivery times and an inefficient direct sales model make them less competitive, market insider Zhou Peng said.

The recent Covid-19 outbreaks have greatly hampered production, as many factories were forced to halt output. Chinese carmakers will have no vehicles to sell this summer if they don’t restart manufacturing soon, Zhou said. Some have not delivered cars to Europe for over 20 days. The full effect of not having local factories will be felt more fully in July, he added.

The European Union is an attractive market for Chinese electric car manufacturers such as SAIC Group, Xpeng Motors, Nio and Hongqi due to the rapidly growing demand, the relatively slow electrification by European carmakers and the fee and tax subsidies introduced by many European nations. Wey, the sports-utility vehicle marque under Great Wall Motor, Dongfeng Motor’s Voyah and Hozon Auto’s Nezha are all planning on entering Europe this year.

But exports rely on transportation, Zhou said. Sea freight is taking around 45 days these days, after which another month is needed for in-land transportation. Whereas locally made autos are available instantly and European vehicle manufacturers are investing heavily in the electric car sector.

The direct-sales model adopted by Chinese NEV startups is also not helping matters, said Zhu Jie, head of overseas business at a Chinese automaker. It generates huge costs and is slow to take effect, resulting in EU sales not being enough to cover costs. Collaborating with experienced European dealers can boost sales volume, but it will still be very difficult for Chinese carmakers to lure more customers with the high cost-performance ratio.

“There is not much time left for Chinese automakers,” Zhu said.

Chinese automakers’ sales volume in Europe is not large compared with US EV maker Tesla’s Shanghai Gigafactory which is a major supplier to the European market and exported 163,000 vehicles overseas last year. SAIC’s best-selling MG marque shifted 18,525 vehicles in 14 EU countries last year, giving it a market share of 1.7 percent. Shanghai-based SAIC sold 1,282 units of its Maxus brand while BYD sold 1,247, according to EU-EVs. As for startups Xpeng, Nio and Aiways, they delivered 486, 200 and 563 vehicles respectively to Europe last year.

Editors: Zhang Yushuo, Kim Taylor