China is not slowing down its production and sales of electric vehicles. The country is the global leader in both, with new data suggesting they will remain at an all-time high for some time to come! Naturally, Western companies are looking to grab a share of the China electric vehicles market. Succeeding in the Chinese EV (electric vehicles) market won’t be easy (especially with tough local competition), however, brands like Tesla are proof that it is possible. Western companies need to understand the unique dynamics of the Chinese EV market and adapt their products and strategy to succeed. Here’s a look at what you need to know about the Chinese EV market.
China Electric Vehicles Market Overview
China is the largest producer and buyer of electric vehicles in the world, accounting for more than half of all-electric cars produced and sold in the world in 2018. Given the global increase in environmental awareness, many countries have shared the same growing popularity for electric vehicles. In 2019, China ranked the highest together with the United States and Germany.
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For the first 10 months of 2021, new energy vehicle deliveries in China gained 191.9% year-on-year (2.14 million units sold) with a 13% share of the market!
Similarly, the number of business-related new energy vehicles has exploded in 2021 in China (+180000) and the country now count more than 321000 business in the industry. China has taken the turn and represents an incredible opportunity for (non-Chinese) companies that are willing to put in the efforts
Chinese infrastructures push the development of electric vehicles
China has set itself the goal of making new energy vehicles account for 25% of car sales by 2025. To increase national productivity, national electric vehicle startups have been exempted from a sales tax of the 10%, and subsidies were provided for buyers of electric vehicles. This will help make China the largest electric vehicle market in the world measured by sales volume.
The development of new infrastructures that push for the development of 5G and artificial intelligence, also creates a favorable condition for the growth of electric vehicles, promoting technologies such as autonomous driving and the internet of vehicles.
Furthermore, China is the world leader in charging infrastructure. As of 2019, China operates the world’s largest electric power grid with over 1.2 million charging points, according to the China Electric Vehicle Charging Infrastructure Promotion Alliance, and promises to build a nationwide network of 4.8 million charging points to accommodate 5 million electric vehicles by 2020.
Covid-19 effect on China’s electric vehicle market
China’s electric vehicle market is experiencing a shock after the pandemic. While sales of new energy vehicles fell by 37.4% from January to June from the previous year, sales of premium electric vehicles increased rapidly from May, with Tesla sales tripling from April to May and those of NIOs which have seen an increase for three consecutive months.
The electric vehicle market continues to be very promising with the growing demand from the population and the development of companies capable of meeting the needs of Chinese consumers.
Top 10 best-selling electric vehicle manufacturers
Tesla was the best-selling electric vehicle brand in the world in 2020, followed by Renault Zoe and Nissan Leaf, according to a report released by EV-volumes.com (an international electric vehicles sales database).
Tesla won the top spot with sales of 367,820 for last year (Tesla reported revenue of $1.4 billion in China in the second quarter, soaring 102.9 percent year-on-year) followed by the second-best, BYD, with 229,506 sold. BAIC ranked third, selling 160,251 electric vehicles in 2019.
It’s worth noticing nearly half of the world’s top 10 best sellers in 2019 were Chinese brands, reflecting the huge potential of the new energy vehicle market in China.
However, in 2020 the situation changed: while Tesla remained the undisputed leader, BYD dropped to 5th place while BAIC disappeared from the rankings and appeared GAC Aion S.
The advantage of the Model-3 over its competitors is impressive, with over 100,000 sales more than the second, the Renault Zoe.
While sales in Europe and North America have suffered a severe blow, due to Covid-19. Tesla instead made a profit from local manufacturing in China, where it became the best-selling NEV model by a large margin.
- The Renault Zoe has been redesigned for MY2020, deliveries to Europe began in the fourth quarter of 2019 and sales were 48% higher than its predecessor.
- The Nissan Leaf lost another 32% from last year, with losses in all regions, showing that Nissan is less and less committed to the Leaf.
- The e-Golf, which will soon be abandoned, is still going strong (+ 35% y / y), as VW has boosted production and sales with the advent of the new ID.3.
- The Hyundai Kona is now produced in the Czech Republic for sales in Europe, which will improve availability in the second half of 2020.
- The first PHEV in the top-10 is the venerable Mitsubishi Outlander, introduced in 2013, refurbished 2 times and still one of the few PHEVs that can use DC fast chargers. Sales in the first half were 31% lower y / y and a subsequent model is not certain at the moment.
- The Audi e-tron quattro has become the leader in the large SUV category, a position firmly held by Tesla Model X since 2017. The launch of global sales began in the fourth quarter of 2018 and sales doubled from the first. semester of 2019.
- The volume of the VW Passat GTE comes from both the European version (56%, mainly Station Wagon) and the Chinese version (44%, all sedans).
Many vehicle manufacturers see China as a core market for electric cars
As Chinese consumers’ awareness improves, and policy support is withdrawn, they are becoming more rational in their choices regarding new energy vehicles. Therefore a deeper understanding of customer needs, and improving their experience will be key to driving profitability. This is a huge market for many vehicle manufactures and the following examples explain how much China is seen as a core market for electric cars:
- In April, Toyota Motor and BYD signed a 50-50 joint-venture agreement to produce electric vehicles and the batteries they will need.
- BMW and China’s massive State Grid announced a tie-up that aims to double the number of charging piles for the German company’s China vehicles, a shortage of electricity stations that has turned away potential buyers.
- Volkswagen has led the way among foreign firms harnessing China’s early recovery.
Volkswagen said it would invest $2.2 billion in EV-related projects across China. Nearly half of this will increase its joint venture with Chinese state-owned JAC Motors from 50% to 75% and acquire a 50% stake in JAC’s parent company.
Volkswagen also announced that it will become the largest shareholder of Chinese battery maker Gotion High-Tech, buying 26% of the shares for $ 1.23 billion.
How electric vehicle manufacturers are leading the Chinese market?
The large Chinese market often leads companies in the sector to wage war with competitors to increase brand awareness and reliability among Chinese consumers. Companies entering the Chinese market should know how much branding and brand reliability is necessary to sell in China.
Chinese consumers tend not to trust companies they do not know (Even well-known companies outside of China, may not be known by Chinese consumers), they seek information, advice, and reassurance on the internet through social media or Q&A platforms or ask for information from friends, people who know the electric vehicle sector or people who have already tried the vehicle.
Therefore, improving digital brand awareness and reliability is vital for brands in China. But how to do this in China?
Localization is the basic aspect to be successful in the Chinese market. A completely different culture and language lead to completely different marketing strategies than we are used to.
Localizing the content, the channels, the way to communicate are all necessary steps for the Chinese market. For example, companies in this sector should know that social media like Facebook, Twitter or the Google search engine don’t work in China, so which communication channel to use?
Let’s see together how companies in the electric car sector are using the Chinese internet to promote and sell their vehicles in the Chinese market.
Baidu SEO strategy to rank first on the Chinese search engine electric vehicle results
It is essential for a foreign brand to create a visible website on Baidu for two main reasons:
- Chinese are among the world’s largest internet users. To reach Chinese users it is essential to use Baidu. The reason is simple: it holds over 80% of the search engine market.
- Nine out of ten Chinese users say they use Baidu to search online.
Remember that If well indexed on Baidu, traffic to the site will increase exponentially. Therefore, a proper Baidu SEO strategy is important.
Brands should create a Chinese-language website for two reasons:
- will be rewarded by Baidu (therefore it will be faster to load)
- the knowledge of English is not yet widespread in China.
As you can see in the previous picture Tesla has a Baidu account and a Chinese website hosted in China.
If you want to know more about how to create a Baidu account and how to set up a Baidu SEO strategy, or simply to translate your website, contact us!
Chinese Social media to increase visibility in the China’s electric vehicle market
The two most used social media to look for vehicles in China are WeChat (monthly active users 1.2 billion) and Weibo (520 million monthly active users). Therefore, open accounts on social are essential for electric vehicle brands that want to increase brand awareness and visibility in the Chinese market.
Wechat is definitely an effective tool for sharing information and news with your followers. Marketing on Wechat can mean many things:
- new vehicles can be presented and promotions launched,
- create exclusive competitions and games to interact with your audience,
- allow the user to browse the site to receive information.
As you can see here, both Tesla and BYD have a Wechat account to communicate with their community, to share companies updates, new products, new functions, benefits, and so on.
Weibo features make it useful for communicating quickly with many followers at the same time. Weibo is the most open social network in China, in fact, users can see posts from anyone.
Weibo offers brands various functions:
- increase in brand awareness
- starting collaborations with Key Opinion Leader
- word-of-mouth spread
- investments in brand advertising
BYD and Tesla are using this social media to show their vehicles functionalities, especially through videos.
Short-video and live streaming have become important for the vehicle industry in China
During the Covid-19 pandemic, Chinese vehicle manufacturers turned to short video platforms like Douyin (TikTok)and Kuaishou to drive up sales. They embraced live streaming as a way to keep the conversation going with potential consumers who were also stuck at home.
The number of live streaming sessions involving the auto industry increased 15 times in March compared to January, and the total number of attendees increased six times.
The new trend of automobile live-streaming has captured the attention of both consumers and content creators with its informative, efficient, and interactive way of connecting to its users.
The use of these platforms could be a big opportunity for brands to increase their brand awareness and to show their brand’s value to their customers, gaining visibility and increasing sales.
Live streaming is very popular in China and are particularly loved by users for their ability to be transparent and authentic.
KOLs: Collaborate with industry experts to promote electric vehicles
Whether you are interested in boosting awareness or generating leads, a KOL can do wonders for reaching your ideal audience. Your KOL search should consist of choosing an influencer that has quality content and deep insights into their viewers. In the electric vehicle industry, the best way is to collaborate with industry experts which can contribute to making the brand more reliable and interesting.
For example, as you can see in the following picture, BYD is collaborating with electric vehicle experts to enhance its digital reputation in the Chinese market.
Q&A platforms to spread awareness of your brand and electric vehicles among Chinese consumers
Zhihu is a Chinese question-and-answer site like Quora. Key benefits for electric vehicle brands of marketing on Zhihu are:
- High-quality content
Zhihu is known in China for its reliability, therefore the content engages well-educated users with particular interests, and it can inﬂuences the user decision-making process.
- Word of mouth function
Since most of the users are well-educated, being mentioned on the platform can help your brand establish trust and go viral through word-of-mouth across the community.
- SEO exposure
Zhihu has a very high domain authority on the Baidu search engine. Therefore whenever a keyword is searched for on one of these platforms, you will most likely always see a Zhihu Q&A on the first Search engine results page.
- The rise of brand awareness through Q&A marketing campaign
Brands can register for oﬃcial veriﬁed accounts, where they can build their customer base and interact directly with their fans by answering speciﬁc questions. Companies can also promote their brands and introduce their products in a more professional and technical way.
- Leverage the community to ask questions and talk about you
This allows them to get high-quality user-generated content, improve their user engagement and amplify their influence on social media. The most common practice is for brands to post questions directly related to their products.
- Zhihu Live streaming
Zhihu Live streaming creates opportunities for brands to provide in-depth knowledge, have a discussion, and communicate with users in a more direct way.
Tesla’s Zhihu account:
Read more about Zhihu Marketing
Companies can sell electric vehicle through Tmall e-commerce platform
Electric vehicles in China can also be purchased online and this is possible thanks to the Tmall e-commerce platform.
For more than a year, the Alibaba Group has been experimenting with various online sales methods. And now, the presence of car manufacturers on Tmall is a constant.
For years, vehicles manufacturers have been investing in innovative approaches for the sale of cars and China is the market that is proving more receptive to news than any other.
As you can see in the following photo, Tesla even has a store on Tmall.
GMA can help you to market and sell electric vehicles in China
Gentlemen Marketing Agency is a Digital Marketing Agency that is an expert in helping foreign companies to establish or strengthen their position in China.
We have been here for more than 10 years now, always getting better and bigger. From the outset, we have had 700 satisfied customers. Some of them for a single mission, some of them with whom we are still working and that have grown with us. More than customers we are looking for partners we can develop with.
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