China's Aiways turns to traditional retail model to sell EVs in Europe

TURIN – Chinese electric-vehicle startup Aiways says the coronavirus pandemic has forced it to largely abandon plans to market cars directly to consumers in Europe, and instead will largely rely on traditional distributors and dealers.

Under Aiways' original plan to enter the European and U.S. markets, revealed to Automotive News Europe at the Shanghai auto show in 2019, the U5 midsize SUV was to be marketed through leasing contracts the company would have managed itself, relying on non-automotive partners to deliver vehicles to customers.

"The world changed since the pandemic, and to maintain our goal to enter Europe in 2020, we had to switch in most markets to a traditional distribution model," Alexander Klose, Aiways' executive vice president for overseas operations, said in June in a video interview with ANE.

Aiways is the first Chinese EV startup to sell vehicles in Europe, beginning exports in May 2020. Since then it has sold more than 2,500 units of the U5. 

Online sales will remain a priority, Klose said, adding that prices are the same on the automaker's website and at dealer showrooms. 

Aiways' first European market was Germany, where about 1,000 U5s have been sold, followed by the Netherlands, Belgium, France and Denmark. Sales will start by the end of this year in Italy and Nordic markets such as Finland, Norway and Sweden, Klose said. Spain and Portugal are set to follow in 2022.

Germany is the only market where Aiways will not rely on dealers. Euronics, a consumer economics retail chain, displays, sells and delivers U5 models, including those bought online. (see box, below)

The U5 is the first production vehicle from Aiways, a Shanghai-based startup founded in 2017 by Gu Feng, the former China sales chief of Volvo Cars.

It faces competition in Europe from several new-to-market midsize full-electric SUVs, including the Kia EV6 and Hyundai group's Ioniq 5, as well as compact EV models such as the Volkswagen ID4. The U5 is 4680 mm long – the same as the EV6 -- 1865 mm wide, 1684 mm high and has a wheelbase of 2800 mm. 

Aiways says the U5's selling points include a high level of standard equipment, advanced infotainment and driver assistance systems, and an average transaction price of about 40,000 euros. The U5 starts at 37,990 euros in Germany, while the EV6 and Ioniq 5 start at about 45,000 euros. The ID4 starts at 37,415 euros in Germany.  

The U5 is powered by a 150-kilowatt electric motor that produces 204 hp and drives the front wheels. A 63 kilowatt-hour battery pack is supplied by CATL and guaranteed for eight years. Range is 410 km (255 miles) under the WLTP test cycle, but Aiways says range in urban driving in Eco mode can reach 430 km.

The U5 first went on sale in China in December 2019. It is built in Aiways' factory in Shangrao, southeast China, which has an annual capacity of 150,000 units.

The company said it built 2,500 units in 2020 and plan to build between 10,000 and 20,000 units this year. Roughly half will be sold domestically, and the other half exported, mainly to Europe, Klose said.

The company plans to double those production and export figures in 2022, when a second model will be added.

Klose confirmed the new model will be a production version of the U6ion SUV-coupe concept that was shown in 2020. Production will start at the end of this year, with deliveries to Europe in 2022. It will retain many of the concept's features, including a panoramic dome roof and distinctive rear light matrix.

Aiways expects 2022 sales to be evenly split between the U5 and U6. In Europe, the sportier U6 will cost on average 1,000 euros more than a comparably equipped U5, Klose said.  

The large SUV U7 concept, unveiled in April 2019 at the Shanghai auto show, has been moved down on Aiways' priority list. Initially set to be the second model after the U5 and destined mainly for China and U.S., the U7 will not appear before late 2023, Klose said.

Instead, Aiways is preparing a smaller model, dubbed the U4, that could arrive in early 2023, but Klose declined to offer further details.

The delay in the U7 launch is also related to new timing for Aiways' plan to enter the U.S. market. Initially, export was planned to start in early 2020 for Europe and late that year in the U.S. Instead, the goal is now 2022.

"We are in talks with several partners, not only dealers but also people active in the U.S. automotive landscape," Klose said. "We hope to enter the U.S. next year, starting with the U5 and U6."