Electric vehicles: China’s Chery Automobile enters UK’s car rental business as its Omoda EVs are leased out by Octopus

Electric vehicles: China’s Chery Automobile enters UK’s car rental business as its Omoda EVs are leased out by Octopus

16 Apr Electric vehicles: China’s Chery Automobile enters UK’s car rental business as its Omoda EVs are leased out by Octopus

Posted at 09:28h in Asia by

The tie-up between Octopus and Chery comes just a month after the UK company signed a preliminary agreement with China’s BYD to buy 5,000 cars from the world’s largest electric vehicle (EV) builder over the next three years.
“The fleet business in developed markets like Europe offers growth opportunities for Chinese electric vehicle (EV) makers because their cars enjoy the advantage in production costs,” said Qian Kang, a Zhejiang-based entrepreneur who owns car components businesses. “Car rental services also help Chinese EVs build their brands abroad.”

03:11

Cheap EV alternative to Tesla and BYD takes off in small-town China

Cheap EV alternative to Tesla and BYD takes off in small-town China

Chery, based in eastern China’s Anhui province, is one of several Chinese carmakers actively pursuing growth in European markets, along with BYD, Zeekr, SAIC and Nio.

In February, it started to sell its Omoda 5 sport-utility vehicle (SUV) in Spain, and it plans to offer the SUV in Britain later this year, according to Victor Zhang, Omoda UK’s executive vice-president.

“As a new name to the UK, we know we have to earn the trust of British car buyers,” said Zhang in a statement on Tuesday.

“Octopus is an industry-leading and well-respected company, partnering with them is a key element in making sure we can offer our EV customers the very best experience in an important area of their ownership.”

In mainland China, the Omoda 5 offers customers only the petrol version, with prices starting price of 79,900 yuan (US$11,038). Its electric model, known as the Omoda E5, which has a driving range of 430km, is priced at a much more expensive 146,800 ringgits (US$30,623) in Malaysia.

Octopus can automatically set charging schedules for its electric cars to help owners save electricity bills. Omada users could save as much as £500 (US$622) a year using the company’s Kraken technology platform.

The company, part of the Octopus Energy Group, currently runs a fleet of more than 15,000 electric cars available for hire by individuals and businesses, which include vehicles assembled by Tesla, BYD, BMW and Kia.

The European Commission launched an investigation into foreign state subsidies last September, and is expected to impose tariffs higher than the standard rate of 10 per cent on Chinese-made EVs.

In the United States, the Biden administration is also considering curbs on imports of Chinese electric cars, which Commerce Secretary Gina Raimondo described as posing a risk to citizens as they collect a “huge amount of information about a driver”.

Analysts, however, believe that any potential restrictions on China’s EV exports will not prevent the country’s major players from accelerating their go-global ambitions.

UBS said in September that the Seal, a fully electric sedan made by BYD, has a production advantage over Tesla’s Model 3 assembled in mainland China. The cost of manufacturing the BYD car, a potential rival to the Model 3, is 15 per cent lower, the bank said in a report.

Chery sold 1.88 million cars in 2023, up by more than half from the previous year. This included 937,148 units delivered to customers outside its domestic market, double the number in 2022.

Jetour, another brand under Chery that focuses on EVs, expects its overseas sales to account for half of its total deliveries from 2027 onwards.

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