EU car manufacturers have warned that cheap EVs from China will weaken the market competitiveness of vehicles produced locally in Europe.
According to an analysis from the European Federation for Transport and Environment (T&E), made-in-China EV models will account for a quarter of EV sales in the EU in 2024. Reports from the Financial Times (FT) and The Wall Street Journal (WSJ), and research from T&E showed that approximately 19.5% of EVs sold in the EU were made in China in 2023.
There are two main factors contributing to the increasing market share of made-in-China EVs in the EU. Firstly, Chinese car manufacturers are expanding their sales in Europe. Secondly, overseas manufacturers like Tesla produce EVs in China and then export them to the EU market to meet some of the demand in the market.
T&E pointed out that as Chinese automakers continue to erode the market share of local European automobile brands, this proportion is expected to increase to 25.3% by 2024. Chinese EV brands sold in Europe are 28% cheaper than European EV brands.
Although Western manufacturers like Tesla, BMW, and Renault are producing EVs in China and exporting them to Europe, Chinese EV brands alone accounted for 11% of the EV market in the EU by 2024. This proportion is estimated to increase to 20% by 2027.
The anticipation is that the EU may ultimately impose tariffs on Chinese EVs as part of an anti-subsidy investigation. T&E believes that tariffs will compel automakers to produce EVs locally in Europe, which would create job opportunities. However, tariffs are not a long-term solution to protect traditional automakers, as Chinese manufacturers will build production sites in Europe. The European automotive industry needs to be prepared.
In particular, Chinese EV leader BYD has announced plans to build a new factory in Hungary, with EV production expected to start by the end of 2025. BYD aims to become one of the largest EV brands in Europe by 2030, accounting for 10% of the market share by that time. The company has already seen its market share in the European EV market increase from 0.4% in 2019 to 8% in 2023.
