By Nick Carey, European Autos Correspondent

Greetings from London!

I am fresh back from China, where we, fresh out-of-towners Reuters folks, did exactly as a local colleague predicted, spotting Chinese-branded cars we’d heard of on the streets of Shanghai, while also puzzling over ones we’d never heard of.

Who makes the Maple, we wondered (Geely)? Who owns the Arcfox and Stelato brands (BAIC)? And so on.

Amid the mind-bending vastness of the Shanghai car show, dozens upon dozens of brands compete for consumer attention.

Few of them, however, are profitable and they face intense pressure from a raging EV price war to innovate their way to survival

Which brings us to today’s Auto File…

• Porsche’s 911 gambit

• China’s hybrid redux

• BYD’s European miscues

Porsche plays its 911 card in China

There was a running joke during Rudy Giuliani’s abortive presidential run in 2008 that he would counter any awkward question by saying “But 9/11,” a reference to the pinnacle of his career responding to the Sept 11th 2001 terrorist attacks in New York.

“But 911” seems to be Porsche’s answer to its problems in China.

After declining sales in China for the last three years, Porsche’s business there plunged 42% in the first quarter. Worse yet, its electric vehicles have been slammed on Chinese social media with consumers complaining about poor software.

Porsche’s response? Two limited combustion-engine editions of its iconic 911, the very pinnacle of the brand’s legacy, but hardly enough to recapture lost market share in China. You can read about it here.

CEO Oliver Blume brushed all of this off, saying: “We don’t care about the volume.”

Given that Porsche’s shares are down more than 40% since the automaker’s September 2022 stock market debut, it looks like shareholders do care about volume.

Blume followed that head-scratching comment up by saying the company’s EV sales are low in China, adding “we will see in the next two to three years whether Porsche exists as an electric brand here."

Other automakers including Porsche’s own parent company Volkswagen, General Motors’ Cadillac brand, Nissan and Toyota all played up their electric offerings at the Shanghai car show.

But Porsche’s response seems to be to throw in the towel and give up on a market that is rapidly going electric.

Recommended reading:

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• GM boosting Ohio transmission plant

Rise of hybrids in China

The rapid deployment of slick new EVs garners the most attention, but Chinese automakers are leaning more on plug-in hybrids and extended range electric vehicles (EREVs) to woo consumers still anxious over range despite the country’s huge investments in charging infrastructure.

You can read about it here.

Sales of both EREVs and plug-in hybrids (PHEVs) grew faster than pure EVs in the China market last year, pushing the whole electrified sector to about half of all new cars sold, according to data from the China Passenger Car Association.

EREV sales jumped 79% to 1.2 million vehicles and plug-in hybrids soared by 76% to 3.4 million, while EV sales grew 23% to 6.3 million units.

Unlike PHEVs, which have a combustion engine powertrain with an electric motor that provides some zero-emission range, EREVs are EVs with a back-up gasoline generator that provides extra range.

Though the outcome is similar, the difference in powertrain means that PHEVs are not subject to EU tariffs while EREVs are.

Chinese automakers have been launching EREV models with range over 1,000 km (621 miles) and are moving fast to roll out long-range PHEVs.

Geely unit Zeekr has launched the 9X - a large plug-in hybrid SUV that can travel on electric power alone for 400 km (249 miles) before needing its gasoline – a range almost as long as many full EVs and far longer than typical PHEVs outside China.

More long-range PHEVs and EREVs are coming as sales are expected to keep on growing.

BYD’s early European wobbles

China’s No.1 automaker BYD has been on an unparalleled tear in China over the last five years, growing sevenfold to become the world’s No. 7 automaker by sales. Its first-quarter profit jumped 100%.

The company has its finger on the pulse of China’s market and rarely seems to make a wrong turn with its large lineup of EVs and PHEVs.

But in a story lead by my Reuters colleague Giulio Piovaccari, it looks like BYD misjudged its entry into Europe in 2023, hiring too few experienced managers, signing up too few dealers and relying solely on EVs, which are a tough sell in many European markets.

The company has since hit the reset button, poaching rising stars from other automakers, beefing up its dealer networks and launching PHEVs to reach more consumers.

You can read about it here.

The history of the automotive industry is littered with examples of companies that misjudged their entry into markets – Stellantis and Renault, for instance crashed and burned in China – or came up with disastrous models like the Ford Pinto or the Tesla Cybertruck.

But BYD acknowledged its problems early and moved swiftly to address them, which so far seems to have boosted its sales in Europe.

Leapmotor’s platform business

Leapmotor will supply an EV platform to Chinese state-owned automaker FAW for overseas sales of its Hongqi brand.

You can read about it here.

The deal brings together Leapmotor, a profitable upstart automaker in China's crowded EV market, and the country's oldest auto brand, which started out supplying sedans for Communist Party leaders and has emerged as a fast-growing premium brand.

Mass production of the new model under the Hongqi brand - Red Flag in English - will start in the second half of 2026.

Leapmotor CEO Zhu Jiangming confirmed to Reuters that the company was also in talks with Ferrari – whose CEO Benedetto Vigna visited Leapmotor in February.

Later his company said there were no discussions underway with Ferrari, but clearly Leapmotor is an EV maker to watch.

Fast Laps

- Nissan flagged a record loss but saw its shares rise almost 2% after it announced a massive asset write-down reduction and hefty restructuring fees that appeared aimed at clearing the decks for a badly needed turnaround.

- Alphabet's Waymo self-driving taxis may be available for people to own in the future, CEO Sundar Pichai said, just as Tesla prepares its U.S. rollout of robotaxis this year.

- Chinese SUV maker Jetour, a Chery brand, will launch in some European markets in the third quarter and aims to sell cars across much of the continent by 2027.

- Toyota is exploring the possibility of investing in a potential buyout of key parts supplier Toyota Industries, which reportedly could cost $42 billion.

- Vietnamese EV maker VinFast will open a car assembly plant in India by the end of June and another one in Indonesia in October as the company shifts its focus to Asia.

- Chinese automaker Great Wall Motor is looking to use Brazil as a base for vehicle production and expand to nearby regions.

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(Editing by Tomasz Janowski)

((tomasz.janowski@thomsonreuters.com))