Analysts from UBS Group believe that Western car manufacturers may lose up to a fifth of their global market share due to the growing number of Chinese car manufacturers launching EVs.
A report published on August 31 asserts that the 81% share of the global automotive market that Western car manufacturers had in 2022 will slip to 58% in 2030 while Tesla’s share will jump from 2% in 2022 to 8% in 2030. UBS Group analysts are particularly optimistic about BYD, indicating the Chinese firm will almost double its share of the automotive market by the end of the decade.
UBS recently tore down a 2022 BYD Seal and found that 75% of its components are manufactured in-house. It believes the brand has a 25% cost advantage over North American and European brands and that this is why it has been able to undercut them on price. Additionally, fewer than 10% of the parts used by the Seal come from foreign suppliers, allowing BYD to almost completely control a fully integrated supply chain. BYD is also said to have a 15% cost advantage over Tesla Model 3s currently manufactured in China.
“In our base case, the global market share of Chinese OEMs [original equipment manufacturers] will grow from 17% to 33% by 2030, with European OEMs seeing the biggest loss of market share. The global market share of legacy OEMs could drop from 81% to 58% between now and 2030,” UBS analyst Patrick Hummel stated.
Read: More Chinese Automakers Than Ever Attended The 2023 Munich Motor Show
Auto News notes that the UBS study indicated Chinese car manufacturers will manage to grow significantly by the end of the decade despite not having a significant presence in the U.S., Japan, South Korea, or India.
After the release of this report, UBS downgraded both Volkswagen and Renault, noting that both companies are exposed to competition from Chinese car manufacturers and Tesla throughout Europe. In a note issued to clients, UBS analyst David Lesne suggested that Renault’s European market share could shrink from the current 10% to around 7% in 2030. UBS added that “VW [has] ceded its first-mover advantage in EVs with execution in key areas below our expectations,” CNBC reports.
