European young people fall in love with Chinese "old folks' joyrides" | Going global to New Land

Global business is in turmoil and upheaval, and going global has become an inevitable proposition for many Chinese companies at present. There are 6.5 billion people overseas, scattered across nearly 200 countries and regions with extremely unbalanced development. The difficulty of entering this complex market may far exceed the entrepreneurs' pre - judgments or imaginations.

Yingke has been paying long - term attention to overseas markets and companies going global. Based on this, Yingke has launched a new column: "Going Global New Land". We will cover developed countries and regions such as Europe, the United States, Japan, and Australia, and also focus on emerging markets in Southeast Asia, Latin America, the Middle East, and Africa.

The column will center around companies and products. From a professional perspective, it will dissect the practical processes of successful companies going global, and analyze the causes and consequences of popular products in a country or region. Our higher expectation is to discern and convey the glimmers of new trends.

The following is the eighth article in this column.

Author | Ye Danxuan

Editor | Yuan Silai

Recently, Henry, an overseas Chinese in Spain, noticed a display stand for "old - folks' joy" vehicles in a shopping mall in Madrid. He told Yingke that in the past six months, when on business trips in EU countries such as Italy and France, the "old - folks' joy" vehicle models commonly seen in China have been taking over European alleys.

"Old - folks' joy" is a common name for low - speed electric vehicles in China. They are commonly in the form of three - wheeled small pickups (i.e., "trikes") or low - speed two - seat four - wheeled vehicles. Taking the popular models on European streets as an example, the appearance of "old - folks' joy" vehicles is actually similar to that of mini - cars. The most authentic trikes cost less than 1,000 euros without freight. If it's a four - wheeled micro - car, the price ranges from 8,000 to 20,000 euros. At the 2019 Paris Motor Show, President Macron test - drove a similar small car.

According to Henry's observation, different from the situation in China, there are many young people among the users of "old - folks' joy" vehicles in Europe. Middle - class families may even prefer to buy them for their high - school children for commuting.

In fact, every time "old - folks' joy" vehicles appear overseas, they attract a lot of attention. In China, the market education for "old - folks' joy" vehicles is usually carried out in a "rural encirclement of urban areas" way. Their sudden appearance on the roads of developed countries gives people a sense of contrast.

A low - speed electric vehicle manufacturer told Yingke that for a long time, "old - folks' joy" vehicles in China have been in a gray area in terms of road rights, and their usage scenarios are not clear. However, in overseas markets, there are relatively strict definitions for the access standards of passenger and commercial vehicle models, which forces manufacturers going global to further refine product classification.

The manufacturer said that in the first half of 2024, there was an obvious small peak in the order volume in the US market, with the order volume doubling. In the next year, the European market will be the focus of the company's overseas business.

As the road - right restrictions on low - speed electric vehicles in China become clearer, electric vehicle manufacturers are accelerating their steps to enter overseas markets. In just one year, not only Chinese manufacturers have flocked to the "old - folks' joy" vehicle market, but traditional European automakers have also started to make efforts in the low - speed electric vehicle field.

Europe, the New Hotspot for "Old - Folks' Joy" Vehicles

The overseas advantageous market for "old - folks' joy" vehicles is in Europe.

In 2022, the EU's plan to ban the sale of fuel - powered vehicles by 2035 was officially finalized and took effect. This means that after 2035, EU countries can only sell pure - electric new energy vehicles and new cars using e - fuels synthetic fuels.

The implementation of the policy has directly promoted various demands for electric vehicles in Europe, and the trend of vehicle electrification has been accelerating. According to data from the European Automobile Manufacturers' Association (ACEA), in January this year, the sales of pure - electric vehicles and hybrid vehicles both increased significantly. The market share of pure - electric vehicles rose to nearly 17%, while the market share of traditional fuel - powered vehicles continued to decline.

Due to the long - term unregulated growth of "old - folks' joy" vehicles in China, in traditional perception, low - speed four - wheeled "old - folks' joy" vehicles and electric vehicles do not belong to the same category.

However, the aforementioned low - speed electric vehicle manufacturer told Yingke that the EU has not defined low - speed electric vehicles like "old - folks' joy" separately. Instead, they are classified as four - wheeled motor vehicles and share most road rights with other electric vehicles.

Yingke learned that currently, low - speed electric vehicles in the EU are mainly divided into two categories: L6E - class light four - wheeled electric vehicles refer to low - speed electric vehicles with an unladen weight of no more than 350 kilograms (excluding the battery), a maximum speed of no more than 45 kilometers per hour, and a motor power of no more than 4 kw; L7E - class heavy four - wheeled electric vehicles are those with an unladen weight of no more than 400 kilograms and a maximum motor power of less than 15 kw.

People over 14 years old can drive L6E - class four - wheeled electric vehicles, while for L7E - class vehicles, it is relatively stricter. Drivers must be at least 16 years old and pass a driving training test.

At the same time, the mainstream low - speed four - wheeled electric vehicles in Europe have a speed - limit standard, usually 45 km/h or less, and a full - charge cruising range of about 75 km.

Wuling Hongguang Mini, image from Wikipedia

Henry, an overseas Chinese in Europe, said that due to the loose access threshold, a considerable number of people driving "old - folks' joy" vehicles are minors. The public transportation coverage in some rural areas of Europe is not high. Usually, schools provide small school buses for pick - up and drop - off, but the school - bus schedules are fixed, resulting in low travel freedom. Therefore, some parents of European middle - school students have set their sights on "old - folks' joy" vehicle models.

In addition, "old - folks' joy" vehicles are small in size, occupy less space, are light in weight, and are very flexible to maneuver, making them very suitable for the narrow streets in Europe. Take the streets in Madrid as an example. The city center is full of one - way streets, and even the modern main traffic roads are usually designed with only two lanes.

In fact, small - sized vehicle models have always been very popular in Europe.

According to data from the website carsalesbase.com, in 2019, the sales of micro - cars accounted for 7.7% of the total automobile sales in Europe, while in the United States, it was 0.5%. In China, this figure is even lower than that in the United States, with the latest data being only 0.3%.

European established automobile manufacturers have long covered this market. Fiat designed a two - seat micro - car as early as 1955, which is highly similar in appearance to "old - folks' joy" vehicles. The original design intention was to adapt to the crowded urban streets in Europe.

In 2023, Fiat electrified this model and renamed it Topolino, re - entering the market in the form of an electric vehicle. The starting price of the new car is 7,544 euros (about 58,000 yuan).

Topolino, image source: italpassion

However, the form is not important. The competitors of "old - folks' joy" vehicles are not only other manufacturers but also micro - cars. Compared with "old - folks' joy" vehicles, which are imported products, four - wheeled micro - cars obviously have more advantages in terms of legality and usage habits. With the entry of European established automakers, the overseas market potential of this Chinese business of "old - folks' joy" vehicles may not be that great.

Current Situation of Chinese Companies Going Global

Data from the "2024 Historical Review and Development Trend Forecast Report of the Low - Speed Electric Vehicle Industry" shows that the global low - speed electric vehicle market size was 62.637 billion yuan in 2023, and it is expected to reach 79.451 billion yuan by 2029, with an annual compound growth rate of 3.30%.

According to statistics from research institution QYResearch, Europe is currently the largest market for electric four - wheeled vehicles, accounting for 56.33% of the global revenue market as early as 2019.

The aforementioned low - speed electric vehicle manufacturer told Yingke that although Europe has always been an advantageous market, there is a "time difference" between Chinese manufacturers and overseas markets. The sales networks of most manufacturers are still mainly in China. "After the new national standard for 'old - folks' joy' vehicles was introduced in 2023, the sales and on - road use in many cities were greatly restricted, so manufacturers began to consider shifting their markets overseas."

Although the safety hardware specifications for low - speed four - wheeled electric vehicles in the EU market are not very strict, they need to be equipped with basic facilities such as seat belts, windshield wipers, and headlights. At the same time, due to the long - term lack of unified standards in the "old - folks' joy" vehicle market in China, the performance of vehicles in terms of braking and steering is relatively rough.

Therefore, low - speed four - wheeled electric vehicle manufacturers need to make adjustments in terms of battery safety, crash tests, etc. according to EU export standards. Take her company as an example. Because the vehicle models were modified according to EU access specifications and driving habits before entering the EU market, the pace of going global was forced to slow down.

However, as Yingke learned, currently, Chinese "old - folks' joy" vehicle manufacturers still adopt the model of domestic production + overseas assembly and distribution. This means that after - sales service is also provided by overseas distributors, and usually, the distributors' commission can reach 5% of the vehicle's selling price.

Some manufacturers have set their sights on emerging markets with less - perfect regulations. Reading, an electric vehicle company that few people in China know about, has cooperated with local enterprises in Ethiopia and exported thousands of low - speed electric vehicles. The target audience for such products is similar to that in Europe, mainly young people with limited budgets.

However, whether in Europe or Africa, the biggest problem is that "old - folks' joy" vehicles are just cheap commuter vehicles. The competition in the low - price market has always been fierce. As outsiders, Chinese companies can only enjoy short - term dividends. Once, Wuling Hongguang's MINI EV also caused a brief discussion in Europe, but due to its high price, the sales were dismal, and it was taken off the market after only 90 days. Reading also began to face difficulties such as capital shortages and large - scale payment delays in 2022, and was even jointly reported by distributors for fraud.

China's manufacturing industry has strong advantages. However, in overseas markets, there are too many factors other than low price that determine success or failure. Chinese - made "old - folks' joy" vehicles can be popular in Europe for a while, but it is difficult for them to survive in the long term.