China’s electric vehicle (EV) presence in the European market is poised for significant expansion this year, as revealed by a recent policy analysis.
Despite challenges, including concerns over subsidy fairness, Chinese-made EVs are projected to represent more than a quarter of total EV sales in Europe in 2024, marking a notable increase of over 5% compared to the previous year.
In 2023, China’s share of battery-powered EVs sold in the European Union stood at 19.5%, with particularly strong penetration in countries like France and Spain, where nearly one-third of EV sales originated from China.
These insights were outlined in a report published by the European Federation for Transport and Environment (T&E) on Wednesday.
Forecasts indicate that the proportion of EVs sourced from China will surpass the 25% mark in 2024, driven in part by the expanding global footprint of Chinese automakers such as BYD.
While Western brands like Tesla currently dominate the EU EV market, accounting for the majority of sales, Chinese brands are expected to carve out a notable share, reaching 11% by 2024 and potentially expanding to 20% by 2027, as per T&E’s projections.
This surge in Chinese EV presence comes amidst an investigation by the European Commission into subsidies provided to EV manufacturers in China, with a focus on whether these subsidies create unfair advantages for Chinese companies.
Notably, non-Chinese brands like Tesla and BMW, which produce and export EVs from China, could also be subject to scrutiny under this ongoing probe.
Tu Le, the founder of Sino Auto Insights, attributed China’s burgeoning EV industry to incentives implemented in the early 2010s, which spurred a wave of startups and bolstered battery cell production capacity within the country. These developments laid the groundwork for the proliferation of affordable EVs in the market.
The European Union (EU) and the United States (US) find themselves lagging in the electric vehicle (EV) market due to a lack of competitively priced, high-quality EVs. This shortfall arises from a delayed focus by traditional automakers on the design and engineering of such vehicles, according to industry experts.
“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.
Transport & Environment (T&E), an environmental organization, proposed that increasing tariffs on EVs to at least 25%, up from the existing 10%, could make “medium” electric cars, like sedans and SUVs, from China more expensive compared to their counterparts in the EU. However, compact SUVs and larger cars from China would remain marginally cheaper.
T&E further argued that such a tariff hike would necessitate Europe to enhance its self-reliance in battery cell production to support its domestic EV industry.
“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 Sino Auto Insights’ Le.
In response to the policy risks associated with importing EVs manufactured in China to Europe, Chinese-based automakers like Tesla and BYD have intensified their manufacturing endeavors within the continent.
Tesla aims to expand its assembly plant in Germany, while BYD intends to establish a factory in Hungary.
“The aim [of tariffs] should be to localize 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.
