BMW
Ford
With limited sales in 2013 of Electric cars overall, Ford is not strong competition as of right now. Though because the Chinese government is seeking an ambitious goal of having 500,000 electric cars on the road by 2015 and 5 million by 2020, they’re currently looking into expanding their electric car market in China. Ford is investing 1.6 billion USD on building four new factories in China by 2015 and they are already in a joint venture with Changan Automobile Group.
Currently Ford offers 15 models to Chinese consumers. They plan on expanding that number with the new factories being built and are bringing in their luxury brand Lincoln mid-2014. With the demand for luxury automobiles expected to increase 35%, Ford believes that bringing in Lincoln as a competitor for luxury electric automobiles is a wise business decision as they plan to target wealthier consumers[5].
Premium model i3 is targeting urban upper middleclass consumers at a price of 449 800RMB[9]. The marketing material focusing on small families with one kid, likely one of the target group of Teslas coming Model X. However the BMW is smaller, cheaper and has a different design then the coming Model X, something that can appeal to a different costumer group. BMW already has a strong brand name and they can try to utilize this in their fight for market share in the Chinese EV but as of now they will be targeting a slightly different segment then Tesla[10].
Also, it will likely be cheaper than the Tesla X that have a predicted price of around 600 000RMB. (Estimated 60 000 USD in the US + 50%= likely Chinese prize). BMW is investing heavily in EV and is only beaten by Tesla on electric focus and they are making deals with state grid in order to provide a network of charging stations for their customers[11].
Also BMWs non electric and petrol cars have a strong presence in China and are likely to be challengers to Tesla. Many of them target the same luxury sedan market and the hybrid models as the 5 Series (879,000 RMB) hybrid also targets the environmental conscious consumer around the same price segment as the Model S. BMWs larger sedans and the X series are way more expensive than Teslas S model[12].
Zinoro 1e
Partial owners BMW says Zinoro's goal is to become "a premium Chinese brand that is caring, respectful and contemporary", adding that, "ZINORO 1E is not aiming at sales volume of today. Instead, it is future-oriented to build the ZINORO brand image, raise customer understanding and acceptance of electric vehicle, and drive the commercialization of electric vehicles." This indicates that the Zinoro can be a competitor to count on in the future. Estimated list price is 400,000 RMB something that is slightly under the estimated price of Tesla’s model X[13].
Lexus is the luxury division of Toyota, last year they sold (70,000) vehicles in China in their 99 dealers.
They are producing 15 models, 4 of them are hybrid: Sedan ES300h, sport Sedan GS450h, SUV RX450h, new Sedan CT200h. Recently the vice president of Lexus declared that they wanted to extend the hybrid lineup to every range of vehicles in the brand. The company’s statement for China is “change”, to achieve this statement, they want to adapt their model for the Chinese consumer by delivering smaller engines than in the US, also by designing new vehicles to match the customers taste. Additionally, they have a program of individualization of the car so the customers can make their vehicles as they want, moreover, to attract customers, they extended the warranty to 6 years for the hybrid vehicles.
Considering the high price of the Luxury cars, Lexus is targeting an upper class audience. To attract more customers, branding is the main investment in China for Lexus right now. [15,16,17,18]
Volkswagen Group China is the largest, earliest and the most successful international partner in China's Automotive Industry. It started its connection with China as early as 1978, and has been taking the leading position in the Chinese automotive market for more than 25 years. Its first joint venture in China, Shanghai Volkswagen Automotive Co., Ltd., was established in October 1984. The second joint venture, FAW-Volkswagen Automotive Company Ltd. was established in Changchun in February 1991. China is the largest market for the Volkswagen Brand worldwide. The VOLKSWAGEN Group again leads the Chinese passenger car market in 2006 with a share of about 17.1%[6]
Strategy 2018 will be implanted in four business areas:
Sales and customers: Improve customer satisfaction and brand image through enhanced dealer networks and upgraded service.
Products and technology: Combine Volkswagen’s cutting-edge and the most environment-friendly technologies with local R&D capabilities to generate products that perfectly meet customers’ needs.
Production and supply: Contribute to China’s automobile industry in the long run through increasing capacity, optimizing production and pursuing superior quality.
Responsibility and Partnership: Strive to be an excellent corporate citizen and create added value to society through the fulfillment of social responsibilities; create a long-lasting partnership through the integration of European and Chinese cultures.
Go South” and “Go West” strategies were devised to increase the presence throughout the country, enhance the Volkswagen Group’s positive image in China and keep up with new regional growth trends. Specifically, these strategies include the construction of plants in Changsha, Foshan, Ningbo and Urumqi, which is currently underway, and the significant expansion of the dealer network over the medium term. The “Go South” strategy has already led to a considerable increase in market share in the southern regions since 2008. The “Go West” strategy is designed to enable us to benefit from the growing importance of the inland regions[7].
The Chinese product portfolio covers all segments from small cars to luxury sports cars and therefore targets all audiences. Vehicles that have been specially modified for Chinese customers (with a long wheelbase, for example) and models developed exclusively for the Chinese markets are cornerstones of the business.
The Volkswagen Group has already revealed or put on sale a broad slate of new electric vehicles: the E-up, E-Golf, Panamera S E-Hybrid and the XL1. In 2014, there will be at least six more models, including the A3 Sportback E-Tron[8].
Lexus
VW Group
Competition is still quite mild when it comes to fully electric luxury sedans. However, Tesla must take into account that consumers are often not looking exclusively at electric cars, but their consideration range incorporates all kinds of engine types, and the Chinese auto market is one of the fiercest in the world.
Currently in China, BMW, Mercedes, VW and Audi have dominated the luxury sedan market. All these brands have already established themselves as a symbol of quality and are seen as a symbol of success for the modern Chinese.
Tesla therefore is not only going to compete with other electric or hybrid car options, but will have to face tough competitors that have the advantage of have been in the market for longer time and that have already built a reputation. Tesla is not alone when challenging the market favorites either - Volvo, Cadillac and Lexus have also been strongly promoting their brands and products, and, although less importantly, should also be placed in the pool of competitors for Tesla.
BYD
Mercedes
BYD is founded in 1995 and it specializes in IT, automobile and new energy. The automobile sector is the most innovative independent Chinese auto brand and it leads the field of electric vehicles with unique technologies. Its selection of vehicles include a group of fuel vehicles, the dual mode electric vehicle F3DM, which is now followed up by the BYD Qin, the pure electric vehicle e6 and the pure electric bus K9.
The price of the e6 is 369,800 RMB before government subsidies. The price of the BYD Qin starts from 189,800 RMB before government subsidies. The Qin was the top-selling hybrid or electric car in the first quarter of 2014.
BYD started investing money in improving electric technology eight years ago and now the market environment is good and there are a lot of opportunities for electric vehicles. Because of their investments for the last eight years, they are now able to catch these opportunities. According to CEO Wang Chuanfu, BYD is going to launch new products and improve their electric production capacity. There will be a demand for electric vehicles, since the State Council’s policy is to increase the use of new-energy cars in public transportation, public security system and for officials vehicles. This is also the target market for the e6. They still produce for consumers, but they focus on the commercial sector and more specifically on fleets. [19,20,21,22]
B class Electric drive is a potential threat, but as of now it is not available in China. The car is produced with help from Tesla and has some of the same technology since Tesla has delivered some of the components. However, the B Class is not as high up in the premium segment as Model S. This also is a possible challenger to the model X in the Chinese market if Mercedes would release it here, even though in the US it is priced similar as the BMW i3 and therefore more of a budget model then the Model X [23].
