Munich, Germany– One of the world’s biggest auto shows opens in Munich on Monday, with Tesla ending a 10-year absence to jostle for the spotlight with Chinese rivals as the race for electric dominance heats up.
Chancellor Olaf Scholz will officially inaugurate the IAA mobility show, held in Germany every two years, on Tuesday.
But Monday’s press preview will already give carmakers a chance to show off some of the new models that will be hitting the road soon.
The industry-wide shift towards electric vehicles will be front and centre at this week’s fair, with Chinese carmakers out in force as they eye the European market.
US electric car pioneer Tesla, owned by Elon Musk, will return to the IAA for the first time since 2013 and is expected to unveil a revamped version of its mass-market Model 3.
That Tesla, usually a holdout at such events, is coming to Munich shows it is taking the growing competition seriously, said Jan Burgard from the Berylls automotive consulting group.
“The electric car market with its many new players will be divvied up over the next few years and people want to know: who is offering what?” Burgard told the Handelsblatt financial daily.
Having captured an increasingly large part of the prized Chinese market, Chinese upstarts are now hoping to win over European customers with cheaper electric cars.
Chinese manufacturers are starting “their assault on Europe with the IAA”, said industry analyst Ferdinand Dudenhoeffer from the Center Automotive Research in Germany.
Muted European presence
Chinese groups benefit from lower production costs, allowing them to offer cut-throat prices at a time when entry-level EVs are still a rarity, said industry expert Eric Kirstetter from the Roland Berger consulting firm.
“The only thing they don’t have is brand credibility,” Kirstetter said.
“They will create their brand universe by stepping up their marketing investments more than others, including through trade fairs,” he added.
In all, 41 percent of exhibitors at the industry fair have their headquarters in China, including brands such as BYD and Leapmotor.
Contrary to the Asian onslaught, participation from European carmakers at the IAA will be muted.
Germany’s homegrown champions Volkswagen, BMW and Mercedes-Benz will be joined by Renault from France, but the 14-brand Stellantis Group will only be represented by Opel.
BMW presented its “Neue Klasse” (New Class) generation of electric cars in Munich on Saturday, a series of six vehicles that will be manufactured from 2025.
BMW and fellow European carmakers are investing heavily in the switch towards zero-emission driving as the European Union aims to end the sale of polluting engines by 2035.
The historic transition however comes at a challenging time.
While the supply chain problems caused by the pandemic years have eased, surging energy prices in the wake of Russia’s war in Ukraine and a weaker global economy are weighing on European manufacturers.
Although car sales in the European Union have steadily improved over the last 12 months, they remain around 20 percent below their pre-coronavirus levels as inflation and higher interest rates dampen appetites for new vehicles.
Some 700,000 visitors are expected to attend this week’s IAA.
Climate groups have vowed to stage protests during the fair, including acts of “civil disobedience” aimed at disrupting the IAA.