The Rise of China-made Electric Vehicles in Europe

The market share of China-made electric vehicles in Europe is on the rise, with more than a quarter of EV sales expected to be from Chinese manufacturers this year. This marks an increase of over 5% from the previous year, according to a recent policy analysis. In 2020, about 19.5% of battery-powered EVs sold in the EU were from China, with countries like France and Spain seeing nearly a third of their EV sales coming from the Asian country, as reported by the European Federation for Transport and Environment (T&E).

Looking ahead, the share of China-made vehicles in the European region is expected to continue growing, reaching just over 25% in 2024. Chinese brands like BYD are ramping up their global expansion efforts, which will contribute to this increase. While Western brands like Tesla currently dominate the EV market in the EU, it is predicted that Chinese brands alone will account for 11% of the market by 2024 and could reach 20% by 2027, according to T&E.

Investigation into Subsidies

The European Commission is currently investigating subsidies provided to electric vehicle makers in China to assess whether they are undercutting local companies. This probe includes non-Chinese brands like Tesla and BMW, which also manufacture and ship EVs from China. The findings from this investigation will have implications for the competitiveness of electric vehicles in the European market.

China’s success in the EV market can be attributed to incentives put in place in the early 2010s, which led to a surge in startups and increased battery cell capacity in the country. This paved the way for affordable EVs that are now gaining traction globally. However, there are challenges that come with relying heavily on Chinese batteries for EV production. T&E suggests that raising tariffs on EV imports from China could make them less competitive in comparison to EU equivalents, but this would also require Europe to enhance its battery cell production capabilities.

To mitigate policy risks associated with shipping China-made EVs to Europe, manufacturers like Tesla and BYD have begun ramping up their manufacturing efforts on the continent. This strategic move aims to address concerns about tariffs and subsidies while also positioning these companies for sustained growth in the European market.

The increasing presence of China-made electric vehicles in Europe signifies a shifting landscape in the EV industry. While Chinese brands are gaining momentum and expanding their market share, there are challenges and opportunities that need to be carefully navigated to ensure a sustainable and competitive EV market in Europe.

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