According to a recent policy analysis, China will account for more than 25% of all electric car sales in Europe this year, an increase of more than 5% from the previous year.
TakeAway Points:
- The proportion of vehicles built in China in Europe is predicted to reach 25.3% by 2024, as Chinese companies such as BYD emerge.
- Tariffs must be increased to a minimum of 25% to make EV sedans and SUVs imported from China more expensive than their EU counterparts,
- China-based manufacturers like BYD and Tesla have increased their production operations in Europe in response to the policy risks connected with transporting electric vehicles built in China
25% Electric Cars Sales, china-made
The European Federation for Transport and Environment (T&E) claimed in a paper issued yesterday that about a third of the sales of battery-powered electric vehicles (EVs) in France and Spain last year consisted of EVs delivered from China, which accounted for about 19.5% of all EVs sold in the EU.
Based on the T&E research, the percentage of cars in the region that are built in China is predicted to increase to slightly more than 25% in 2024 as Chinese firms like BYD intensify their global expansion.
Also, Western companies like Tesla, which produces and distributes EVs from China, sell the majority of EVs in the EU, Chinese brands alone are expected to hold 11% of the market in 2024. T&E estimated that by 2027, that percentage might rise to 20%.
Chinese Electric Vehicle
The conclusions coincide with the European Commission’s investigation into Chinese electric vehicle manufacturers’ subsidies to see if they unjustly undercut domestic businesses. Brands that are not Chinese but ship from China, like Tesla and BMW, may be covered by the current investigation into subsidies.
Tu Le, the creator of Sino Auto Insights, claims that early 2010s government incentives in China caused a boom in startups and raised the nation’s battery cell capacity, opening the door for more reasonably priced EVs.
“The EU and the US are so far behind because they don’t have quality EVs at affordable prices because the legacy automakers have only really recently focused on designing & engineering them,” he added.
T&E predicted that while small SUVs and “bigger automobiles” would continue to be marginally more affordable, it would take increasing EV tariffs to at least 25% from the present 10% in order for “medium” electric cars from China, such as sedans and SUVs, to surpass their EU counterparts in price.
The policy group added that, in order to support the homegrown EV industry, Europe would also need to become more self-sufficient in the production of battery cells.
“The conundrum they see themselves in is that they can’t build affordable (and profitable) EVs without Chinese batteries because the Chinese are so far ahead of both the EU & US on the mineral mining, refining, and manufacturing sides,” said Le, Sino Auto Insights.
Policy Risk
China-based manufacturers like BYD and Tesla have increased their production operations in Europe in response to the policy risks connected with transporting electric vehicles built in China to the continent. While BYD intends to construct a factory in Hungary, Tesla is looking to expand its assembly plant in Germany.
“The aim [of tariffs] should be to localise EV supply chains in Europe while accelerating the EV push, in order to bring the full economic and climate benefits of the transition,” T&E said in their report.
