Greenpeace activists drown three cars in a small lake outside the IAA convention center (Christoph Stach).
Tesla and Chinese carmakers showed off their latest electric models at the Munich auto fair on Monday, posing a tough challenge to their European rivals as competition intensifies in the sector.
The industry-wide shift towards electric vehicles (EVs) was on full display on the opening day of Germany’s biennial IAA mobility show, one of the world’s largest.
Domestic giant Mercedes-Benz unveiled its CLA concept, a family of fully electric cars with a range of more than 750 km (466 mi), while BMW unveiled its “new class” of battery-powered vehicles. ) generation demonstrated.
Renault launched its new Scenic, the first full-electric compact SUV from the French conglomerate.
But it was non-European brands that promised to make headlines at this week’s fair.
American electric car pioneer Tesla, owned by Elon Musk, returned to the IAA for the first time since 2013, prompting visitors to clamor to catch a glimpse of its revamped, mass-market Model 3.
Industry experts said Tesla’s presence in Munich is a sign that it is taking seriously the growing competition in the EV market — particularly from China.
Already cornering a huge chunk of the prized Chinese market, Chinese manufacturers were present at the fair hoping to win over European drivers with affordable electric cars.
Ferdinand Dudenhofer, an analyst at the Center for Automotive Research in Germany, said the Chinese conglomerates were “launching their attack on Europe with the IAA”.
Overall, 41 percent of the exhibitors at the fair are headquartered in China, including brands such as BYD, Leapmotor and Geely.
– ‘Important’ Chinese market –
Chinese conglomerates benefit from lower production costs, allowing them to offer steep prices at a time when entry-level EVs are still a rarity.
Ola Kallenius, CEO of Mercedes-Benz, said that European companies have to remain competitive in the face of tough competition.
“Don’t make it worse. Don’t start this debate that we should work fewer hours for equal pay, things like that. That would be going in the wrong direction,” Callanius told reporters at the IAA on Sunday.
Citing the costs of setting up transport, customs and distribution networks, Volkswagen CEO Oliver Blume predicted that Chinese competitors would struggle to keep their prices low in Europe.
“The Chinese will not be able to offer Europe the cost level that China has,” he told reporters.
Blume said Volkswagen will “continue to work hard” on cutting costs on its part, adding that the group’s EVs are expected to reach the same price level as its combustion engines in the second half of the decade.
Bloom acknowledged that it was “critical” for VW to be successful in China’s domestic EV market — where it currently lags far behind BYD and Tesla.
“The more electric cars we have, the more we can benefit from economies of scale,” Bloom said.
The historic transition to zero-emissions driving comes at a challenging time for the continent’s auto makers.
While supply chain problems caused by the pandemic have eased, rising energy prices in the wake of Russia’s war in Ukraine and a weakening global economy are putting pressure on manufacturers.
Although car sales in the EU have steadily improved over the past 12 months, they are down about 20 percent from pre-pandemic levels as inflation and higher interest rates dampen appetite for new vehicles.
– Climate protest –
Around 700,000 visitors are expected to attend this week’s IAA, with Chancellor Olaf Scholz visiting the fair on Tuesday.
Climate groups have vowed to stage protests, including acts of “civil disobedience”, aimed at disrupting the fair.
On Monday morning, Greenpeace activists submerged three cars in a small lake outside the convention center.
“The car industry is dependent on a lot of cars, which are very big and very heavy. It is drowning the planet with that business model,” Greenpeace spokeswoman Marissa Resser told AFP.