(JW Insights) Jun 30 -- The share of Chinese brands in West Europe’s new energy vehicle market is set to rise from 6 percent last year to 9 percent this year, according to a report released on June 29 by consulting agency TrendForce.

Affordable electric vehicles from Chinese companies are ideally suited to meeting current demand as western European countries are struggling with high inflation, the report said, adding that Chinese NEVs also offer cutting edge technology.

Chinese carmakers have been expanding overseas in recent years, aiming to challenge the dominance of the auto industry by European, US, Japanese, and South Korean makers. China’s car exports are still mostly of fuel vehicles, but NEVs made up over 25 percent in the first quarter of this year, and NEVs are key for Chinese automakers to further explore overseas markets, the report said.

China made an early start in pushing its NEV industry and has built a complete supply chain and sufficient capacity, it added. Chinese battery makers have developed cost-effective lithium iron phosphate battery technologies, and have invested in upstream lithium resources both at home and abroad, allowing for stable supply of parts and components and enabling the domestic NEV industry to control costs.

These factors give Chinese car companies an advantage in overseas expansion.

It makes sense for Chinese automakers to eye countries in West Europe that have set a clear timetable for eliminating fossil fuel vehicle production, the report noted, adding that Chinese NEV brands are also set to take a 63 percent share of the Southeast Asian NEV market this year.

Entering a new market requires huge investment, including building showrooms, after-sale service networks, and charging infrastructure, as well as ensuring compliance with local laws and regulations.

Managing these additional costs while maintaining competitive pricing is the key for Chinese automakers to succeed in overseas markets, the report from TrendForce said.