Chinese Aiways exits home market to focus on Europe

Troubled Chinese EV maker Aiways, one of the first to establish a presence in Europe in 2020, is preparing to leave its home market. Paralyzed by the ongoing price war, it wants to focus merely on Europe, according to sources quoted by Reuters and Autocar.

Aiways Europe, headquartered in Germany, is looking for new capital through a de-SPAC merger with US special purpose acquisition company Hudson Acquisition Corp, which is expected to close on December 31, 2024.

Lifeline in Europe

According to the news agency, the deal is a lifeline for Aiways, which halted production at its Shangrao plant last summer as a fierce EV price war in China squeezed automakers’ margins. “The new entity will be strategically positioned to capitalize on our vision and resources in the European EV market,” Alexander Klose, managing director of Aiways Europe, said in a statement last week.

“The center of Aiways global sales operations will switch to Europe, and more specifically Germany, following the listing. There are no plans to remain in the Chinese market due to the intense pricing pressure and competition there,” a source told Autocar.

Big Chinese investors

The manufacturing will remain in China, where the company has a modern factory in Jiangxi Shangrao with a capacity of 300,000 vehicles a year and a battery pack factory in Shangshu. R&D is headquartered in Shanghai.

The company was founded in 2017 with some big Chinese names as investors, like tech giant Tencent, ride-hailing group DiDi, and the world’s biggest battery maker, CATL. Reuters quotes a source familiar with the matter, saying they will remain shareholders after the merger.

However, the main focus will shift to Aiways Automobile Europe GmbH. This entity signed a letter of agreement with Hudson Acquisition Corp. From that German headquarters, Aiways Europe has a presence in 17 European countries today.

Former Chinese Volvo exec

Aiways was founded in 2017 by a former Volvo car sales chief in China. It started exporting to Europe in September 2020 with an electric middle-sized SUV called U5, which was actually the first Chinese EV to reach the Old Continent. It was introduced at €39,750 in Belgium in 2022. The U6 is the carmaker’s second model, but it hasn’t yet reached Europe.

Belgian Cardoen was among the first to welcome the new Chinese start-up in Europe. It was not an obvious move, Ivo Willems, co-CEO of Cardoen, said at the Antwerp presentation of the U6ion. The car supermarket focuses on private customers “who don’t have the budget to purchase an electric car yet.”

But it is precisely these private buyers who are most reluctant today to go electric due to high initial EV purchase prices. This is feeding a global anti-EV trend, which is quite outspoken in countries like Germany and Belgium.

Cardoen, since 2018 daughter of French Aramisauto, is Belgium’s largest independent car sales chain with ‘car supermarkets’ in 16 Belgian cities. It started in 1949 as a second-hand family business but grew into a multi-brand car supermarket chain with both second-hand and new cars.

New entry-level crossover

The Aiways U6 was meant to be the first lightweight battery-electric ‘wide-body crossover coupé’. It is built on Aiways’ MAS (More Adaptable Structure) platform. Aiways says it wanted to revive the idea of what was once very popular in Europe, a two-door coupé with sporty lines, by merging it with today’s most popular body style, an SUV.

The result is neither fish, flesh, nor good red herring, with a four-door, somewhat more stretchy SUV. Newmobility.news test-drove it in April last year. Love it or hate it, it looks almost trendy young, especially in flashy yellow, targeting a younger public.

Although it was announced for an introduction on European markets in late 2023, it hadn’t made it to the showrooms yet as production was halted in China in the summer of 2023. Even the U5 isn’t listed anymore on the website of Belgian importer Cardoen, as stock seems to be exhausted.

Apparently, Aiways has been talking with investors since March about restarting production of its existing models and developing a new, affordable car, a new crossover, as it focuses on becoming an export-only brand. Whether this means a completely new model or a revised U6, isn’t clear for the moment.