
Sing when you're winning: how karaoke in cars heralds the triumph of Chinese firms
This was not something the European mind could comprehend a few years ago, according to Volkswagen's chief financial officer, Arno Antlitz. Yet the technology, included in electric cars sold by China's BYD and Xpeng, is just one example of the lessons that Volkswagen and its European counterparts have had to learn as they scramble to keep up with Chinese rivals on track to dominate the global electric car market.
'Nobody in Wolfsburg thinks you need karaoke in the car,' said Antlitz last week at a conference run by the Financial Times. 'But you do need it.'
An Xpeng G6 family SUV on a test in London. Photograph: Jasper Jolly/The Guardian
A decade ago, such humility from the world's second-largest carmaker would have been surprising. Few people in Europe had driven Chinese brands, which were associated with shoddy workmanship. The global industry was dominated by longer-standing car-making countries led by Germany, France and the UK in Europe, and Japan and South Korea in Asia. Yet the advent of batteries offered a clear run for Chinese manufacturers – with huge state subsidies – to try to dominate the nascent electric vehicle industry.
They have seized the opportunity. Chinese brands achieved more than 10% share of European battery EV sales in some months of 2024, according to data from Matthias Schmidt, an electric car analyst – although that fell back to 7.7% in February. But the scale of China's home market is unrivalled, with 12.8m battery and hybrid cars sold in China in 2024 – more than the entirety of the European car market.
China's rapid progress took rivals by surprise, particularly after technological leaps during the years of coronavirus pandemic isolation. Bentley boss Frank-Steffen Walliser told the FT conference that the technology presented to the world at the Shanghai motor show in 2023 'was kind of a shock coming back after the cold pause'.
Chinese carmakers are increasingly racing towards a future in which the car is completely integrated with the rest of users' digital lives and does most of the driving itself. Of the western carmakers, Tesla is still the leader on this front, but it ceded its technology lead to China's BYD while its chief executive, Elon Musk, focused on getting Donald Trump elected as US president. Despite Musk's support, Trump's policies are expected to leave America's carmakers far behind.
Chris McNally, an analyst at investment bank Evercore ISI, wrote last week, in a note to clients, after visiting the latest Shanghai show, that 'investors have yet to grasp just how far ahead China may be' when it comes to the future of the car. He cited the experience of sitting in massage seats in the Aito M8 luxury SUV, watching a film on a retractable projector screen while Huawei computer chips handled the driving. That was all available for half the price of a western luxury competitor.
The global market share of the big three carmakers in each of Detroit, Germany and Japan has dropped from 74% to 60% in five years, McNally said. 'If you are a US/EU manufacturer and do not have a plan to come to market with an affordable/scaled EV in next five years, you may be out of business in the 2030s.'
He added: 'Is the game lost for western manufacturers? We can only say they appear down big at an auto evolutionary half-time.'
The Shanghai motor show in April. Photograph: Go Nakamura/Reuters
BYD's Seagull has ruffled feathers with a price of about £6,000 in China – far below any rival but with autonomous technology, dubbed 'God's Eye', which matches that available on much more expensive cars. It has achieved that price by using heavier sodium ion batteries that sacrifice range for affordability, but it is still a stark illustration of what European manufacturers are up against.
Chinese carmakers are on average able to develop cars at 27% of the cost of European rivals, according to analysis by Bain & Company, a consultancy.
It is not just at the cut-price end. Chinese manufacturers were out in force at a test day last week run by the Society of Motor Manufacturers and Traders, a UK lobby group. BYD's new £33,300 Seal U DM-i, a plug-in hybrid family SUV, is going up against Volkswagen, whose plug-in hybrid Tiguan can be £10,000 more expensive.
State-owned Chery (under the Omoda and Jaecoo brands) was accompanied by Leapmotor, Geely (owner of the Volvo, Polestar and Smart brands), and Xpeng – whose electric G6 was the first from the brand to make it to the UK. On a week's test, the Guardian found a wealth of driver assistance features and a smart, spacious interior that rival the Tesla Model Y – even if some reviewers found the ride a little too bouncy.
All of them offer keenly priced cars with little to separate them from European rivals, with relatively smooth rides and often impressive voice assistants that allow a driver to open the sunroof without taking their eyes off the road. One of the most popular vehicles for test was the ferociously quick MG Cyberster electric sports car, made by state-owned SAIC.
Read More Top 10 fastest charging electric cars - Driving Electric
There has been some sign of a fightback from Europe. The Renault 5, starting at £23,000, has already achieved huge popularity as one of the first affordable European-made electric cars. Renault has taken pains to cut the production cost of the vehicle as much as possible, and it has been rewarded with huge popularity – although it is unclear how profitable the model will be.
skip past newsletter promotion
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.
after newsletter promotion
The French carmaker has also sought to squeeze the time it takes to get new models to market, from 3.5 years for the Renault 5, down to three years for the next car, the Renault 4, and two years for the upcoming Twingo, with help from an unnamed Chinese partner.
If you can't beat 'em, join 'em appears to be a popular European strategy. Volkswagen has invested in Xpeng (or more properly, Xiaopeng), Stellantis is selling Leapmotor cars in Europe, and is expected to use its technology, while purportedly Scandinavian brands Volvo and Polestar will rely more and more on technology from their owner, China's Geely.
Britain's JLR is working with Chery to make cheaper vehicles under the previously retired Land Rover Freelander brand. Those cars, due to launch late in 2026, 'have the potential to go global', according to JLR boss Adrian Mardell. Nissan boss Iván Espinosa suggested the Japanese carmaker could build Chinese cars in Sunderland, north-east England, to use spare capacity.
Even if they wanted to, avoiding Chinese tech is next to impossible for many companies: batteries are mostly made in China, with some competitors in Japan and South Korea. Europe's battery champion, Northvolt, collapsed. Meanwhile, BYD revealed in March that its new batteries could add 250 miles of range in five minutes of charging, only for Chinese rival CATL to say it could do more than 300 miles in the same amount of time. Shares in CATL jumped by 16% on their stock market debut in Hong Kong on Tuesday.
Europe has some defensive strengths. There are huge networks of dealerships – still the preferred model of purchases – and garages who can carry out maintenance. That will slow down the advance of Chinese brands.
'The European buyer is actually a very conservative buyer, very loyal to their car brands,' said Eric Zayer, who leads on automotive in Europe at Bain & Company. 'It is very hard for the Chinese to enter Europe and replicate the success.'
He added that buyers will need to be persuaded that Chinese brands are not going to disappear – as happened to US electric brand Fisker – causing chaos for owners of vehicles built with regular software updates in mind.
European bosses insist that the game is not lost, even if it is clear that China is at the very least going to win a significant chunk of the global automotive market.
Bentley's Walliser said the 'Chinese are better at risk taking, quicker, working harder' and embracing new technologies. 'It's not magic,' he said. 'It could also be done here.'
Luca de Meo, Renault's chief executive, said: 'We have to not underestimate the resilience of our automotive companies.'

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
34 minutes ago
- Yahoo
Luigi de Vecchi to Join Evercore's European Advisory Practice as Firm Continues to Build in Europe
LONDON, July 25, 2025--(BUSINESS WIRE)--Evercore (NYSE: EVR) announced today that Luigi de Vecchi will be joining the firm in September 2025 as senior managing director and chairman of its continental European advisory business. He will be based in Milan, Italy, where Evercore is in the process of opening an office. Mr. de Vecchi brings over 35 years of investment banking experience to Evercore and has advised on some of Europe and Italy's largest and most high-profile transactions. At Evercore, he will spearhead the buildout of the firm's presence in Italy, and Europe more broadly. He will work in close partnership with Evercore's existing team in Paris, focusing on the firm's large European and global strategic clients. "I am delighted to join Evercore and collaborate with such a talented group of like-minded, exceptional professionals. I am eager to contribute to the firm's ambitious growth plans in Europe and beyond," said Mr. de Vecchi. Matthew Lindsey-Clark, co-head of Evercore's EMEA investment banking business, said, "Luigi brings a wealth of experience and senior strategic relationships that complement Evercore's already strong presence across Europe as well as the firm's expansion plans going forward." Mr. de Vecchi joins Evercore from Citigroup, where he was chairman of continental Europe for corporate and investment banking. Prior to joining Citi in 2012, he was global co-head of investment banking at Credit Suisse, and previously worked at Goldman Sachs and Kleinwort Benson. Mr. de Vecchi received his MA in Business Studies and Economics from the L.U.I.S.S. University in Rome, where he is currently a finance professor and member of the advisory board. He is chairman of Fondazione Sylva, a charity focused on reforestation, and a member of the advisory board of both Save the Children Italia and Fondazione Nuovo Millennio. About EvercoreEvercore (NYSE: EVR) is a premier global independent investment banking advisory firm. We are dedicated to helping our clients achieve superior results through trusted independent and innovative advice on matters of strategic and financial significance to boards of directors, management teams and shareholders, including mergers and acquisitions, strategic shareholder advisory, restructurings and capital structure. Evercore also assists clients in raising public and private capital, delivers equity research and equity sales and agency trading execution, and provides wealth and investment management services to high-net-worth and institutional investors. Founded in 1995, the firm is headquartered in New York and maintains offices and affiliate offices in major financial centers in the Americas, Europe, the Middle East and Asia. For more information, please visit View source version on Contacts Business Contact:Matthew Lindsey-ClarkCo-head of Evercore's EMEA Investment Banking businessCommunications@ Media Contact:FGS GlobalEvercore-Europe@ Jamie EastonGlobal Head of Communications & External AffairsCommunications@ Investor Contact: Katy HaberHead of Investor Relations & ESGInvestorRelations@
Yahoo
35 minutes ago
- Yahoo
China's premier tells EU leaders 'we can't afford' massive industrial subsidies
Chinese Premier Li Qiang dismissed EU fears over Beijing's allegedly excessive subsidies to its industry, telling the bloc's leaders "we can't afford it" in markedly candid remarks during a tense summit. Speaking during a roundtable with EU chief Ursula von der Leyen on Thursday, Li insisted that "China is by no means doing what some call a subsidies policy or fiscal subsidies". "China is not as rich as Europe, and we can't afford it," he said. "We would not be stupid enough to use the fiscal funds accumulated through the government and the hard work of our people to sell our products to foreign consumers," Li added. Von der Leyen and European Council President Antonio Costa were in Beijing on Thursday for a summit dominated by tensions between the EU and China over trade and Russia's war in Ukraine. Chief among the bloc's concerns was its yawning trade deficit with China, which stood at around $360 billion last year. The EU has also raised fears that Beijing's vast subsidies to its industry could help it undercut European competitors with a flood of cheap exports to the continent. Li, China's number two official, rejected those claims in a roundtable with the EU's leadership. "Some enterprises, especially manufacturing enterprises, feel more deeply that China's manufacturing capabilities are too strong, and Chinese people are too hardworking," the Chinese premier said. "Factories run 24 hours a day," he said. "Some people think this will cause some new problems in the balance of supply and demand in world production," the Chinese premier said, admitting: "We see this problem too." Li also rejected claims the Chinese economy -- plagued by sluggish growth for years now -- was in dire straits. "Of course, there are difficulties and challenges, but it is difficult for us to say that China's economy is in a downturn," he said. "Our GDP growth rate is always above five percent," he insisted. ll-mjw-oho/je/tym
Yahoo
an hour ago
- Yahoo
Pool Corp (POOL) Q2 2025 Earnings Call Highlights: Resilient Sales Growth Amid Economic Challenges
Net Sales: $1.8 billion, up 1% year-over-year. Gross Margin: 30%, consistent with the same period last year. Operating Income: $273 million, compared to $271 million in the prior year. Diluted Earnings Per Share (EPS): $5.17, up 4% from $4.99 in the second quarter of last year. Inventory Balances: $1.3 billion, up 3% from the prior year. Leverage Ratio: 1.47, at the lower end of the targeted range. Share Repurchases: $104 million during the quarter, an increase of $36 million from the prior year second quarter. Store Locations: Opened two new locations during the quarter, four year-to-date, and five new Pinch A Penny franchise stores, increasing to 302 franchised stores. Regional Sales Performance: Florida and Arizona sales up 2%; Texas and California sales down 2% and 3%, respectively. European Sales: Net sales increased 2% in local currency and 7% in US dollars. Horizon Net Sales: Declined 2% in the quarter. Commercial Sales: Increased 5% in the second quarter. Pinch A Penny Franchise Sales: Increased 1% for the quarter. Warning! GuruFocus has detected 3 Warning Sign with POOL. Release Date: July 24, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Pool Corp (NASDAQ:POOL) reported a 1% increase in net sales for the second quarter, reaching $1.8 billion, demonstrating resilience despite economic challenges. The company maintained a solid 30% gross margin for the quarter, consistent with the same period last year, highlighting effective cost management. POOL360 platform transactions now represent 17% of net sales, up from 14.5% last year, indicating strong customer adoption of digital tools. Sales in Florida and Arizona grew by 2%, driven by population growth and favorable weather, showcasing the company's strong regional performance. Commercial sales increased by 5% in the second quarter, supported by investments in developing the commercial team and expanding project capabilities. Negative Points New pool construction and larger renovation projects are under pressure due to macroeconomic uncertainty and high interest rates, impacting sales growth. Sales in Texas and California declined by 2% and 3%, respectively, reflecting macroeconomic headwinds and tempered consumer confidence. Horizon net sales declined by 2% in the quarter, with weakness in larger development-related construction projects affecting overall performance. The company lowered its full-year EPS guidance to a range of $10.80 to $11.30, citing the absence of interest rate cuts and external catalysts. Chemical sales faced price deflation and weather headwinds in certain markets, impacting overall sales growth in this category. Q & A Highlights Q: How is Pool Corp thinking about the full year outlook given the dynamics with tariffs and pricing? A: Peter Arvan, President and CEO, explained that the maintenance and repair business remains resilient, and larger renovation projects are being phased to make them more digestible. The company is focusing on investments in NPT centers, private label chemical brands, and technology tools, which are seeing good adoption. Despite challenges, Pool Corp is strategically positioned for growth in desirable areas like Texas. Q: What is the reason behind lowering the EPS guidance for the year? A: Peter Arvan noted that the initial expectation of interest rate cuts did not materialize, impacting new pool construction and larger renovation projects. The adjustment in guidance reflects the current economic environment and the lack of significant improvement in new pool construction. Q: Has price competition abated as the season progressed? A: Peter Arvan mentioned that price competition is more pronounced in the first quarter due to early buy payments. Currently, competitive activity is within normal ranges, with some deflation observed in chemicals but no significant new competitive pressures. Q: How does Pool Corp view the impact of interest rates on new pool construction? A: Peter Arvan highlighted that interest rates affect housing turnover, which in turn impacts new pool construction. A cut in rates could stimulate housing market activity, but the current high rates are a barrier to accessing home equity for pool financing. Q: Can you provide more detail on the gross margin bridge for the back half of the year? A: Melanie Hart, CFO, stated that pricing will be more favorable, and product mix, while still negative year-over-year, is trending positively. Supply chain improvements and private label products are contributing to margin stability. Q: What is driving the growth in private label chemical sales despite a tough market backdrop? A: Peter Arvan attributed the growth to a strong portfolio of brands, refreshed product lines, and the POOL360 WaterTest platform. The comprehensive value proposition and customer confidence in the products are key drivers. Q: How did demand trend by month, and what are the expectations for July? A: Peter Arvan noted that April and May were strong, with a slight slowdown in early June, followed by a pickup in the latter half of June. These positive trends have continued into July, indicating a stable near-term outlook. Q: Are there any product shortages or labor issues affecting Pool Corp? A: Peter Arvan reported no significant product shortages or labor issues. Supply chains are generally in good shape, and there is sufficient labor to meet current demand. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.