Chinese EV brand awareness in the U.S. bodes ‘ominously' for American firms, survey says

Chinese brand awareness in the U.S. poses a challenge to American automakers that are struggling to gain a foothold in EVs beyond early adopters and cutting prices to encourage purchases, a survey suggests.

Most potential buyers are aware of Chinese electric vehicle makers, with an even larger share of those ages 18 to 25 familiar with them, according to the AlixPartners 2024 International Electric Vehicle Consumer-Sentiment Survey.

The findings arose from a survey of 9,000 respondents from March 28 to April 10, including 2,000 in the U.S.

Fifty-eight percent of buyers in the U.S. who were very or moderately likely to make an EV their next vehicle purchase were aware of Chinese brands such as BYD, Leapmotor, Nio and Hozon. That share jumped to 76 percent for those buyers ages 18 to 25 and 73 percent for those 25 to 35.

"It's pretty clear that even with very little market share, the awareness is really growing," said Mark Wakefield, global co-leader of AlixPartners' automotive and industrial practice. The fact that awareness is greater among younger buyers "bodes either well if you're a Chinese EV company exporting or ominously if you are a traditional automaker."

While Chinese EV makers have yet to sell to American consumers, cars are a global market. Chinese companies price vehicles far below American offerings, challenging U.S. exports.

Support from China's government has propped up vehicles such as BYD's Seagull, which retails for less than $11,000, while Americans paid an average of $54,021 for an EV in March, according to Cox Automotive and Kelley Blue Book.

Additionally, Chinese automakers, using their head start on EV manufacturing, have stuffed their cars with enticing software, cutting-edge infotainment and advanced safety features, according to the consulting firm. That, combined with more younger people sourcing their information online, has grown Chinese brand awareness for the TikTok generation.

"These are the buyers of tomorrow," said Wakefield.

Mindful of the competition, U.S. legislators are moving to stymie Chinese companies from gaining access to tax credits. U.S. Rep. Carol Miller, R-W.Va., introduced a bill last week designed to deny them federal tax incentives for investing in the EV supply chain in the U.S.

Mexico is taking steps to limit the country's use as a transit point to the U.S. for Chinese EVs. The Mexican government does not plan to grant inexpensive access to public land or tax cuts to Chinese companies for EV production, according to news reports.

Other findings from AlixPartners' survey include:

• Ninety-seven percent of Chinese respondents were very or moderately likely to buy or lease a battery-electric vehicle as their next purchase, compared with 35 percent in the U.S. and 43 percent in Europe.
• The U.S. figure increased with more time: 40 percent were very or moderately likely to buy or lease an EV by 2030, and 48 percent were by 2035.
• Eighty-three percent of current BEV owners in the U.S. plan to purchase or lease another BEV for their next vehicle.
• Forty-three percent of American respondents were concerned about battery range, a decline from the same concern troubling 49 percent of respondents in 2019, the last survey before the COVID 19 pandemic.
• The share of U.S. respondents who worried about not having enough places to charge grew to 44 percent from 40 percent in 2019. Those who worried about the length of charging time grew to 39 percent from 25 percent. Concerns about lack of service and repair providers grew to 25 percent from 15 percent, and skepticism about home charging grew to 27 percent from 15 percent.
• U.S. BEV owners were slightly more likely than the respondent pool generally to express concern that there were not enough places to charge.