Europe Grapples with the Surge of Chinese Electric Vehicles, Even as They Gain Popularity Among its Citizens

While contemplating the switch from her French gasoline-fueled SUV to an electric vehicle, Laima Springe-Janssen evaluated options from Volvo and Nissan. She found Volvo’s additional features prohibitive for her budget and Nissan’s offerings lacking in allure. Eventually, the resident of Copenhagen, Denmark, opted for a compact SUV from China’s BYD Auto.

Springe-Janssen expressed strong satisfaction with her BYD Atto 3 SUV, acquired for approximately $50,000. The vehicle came equipped with a host of premium features, including a 360-degree dashboard camera, complimentary charging for two years, and an extra set of winter tires. Her husband is so impressed that he is contemplating replacing their existing Volkswagen Skoda with another BYD vehicle.

This recent photograph of Springe-Janssen standing beside her BYD vehicle in Gelsted, Denmark, captures her enthusiasm for the Chinese brand. “Regrettably, Europe is being outperformed. China’s offerings are superior,” she remarked.

Such sentiment underscores the burgeoning success of Chinese automakers in Europe’s electric vehicle market, posing a considerable challenge to established local brands critical to Europe’s transition to sustainable energy. The burgeoning competition has led the European Union to initiate an inquiry into Beijing’s subsidization of its electric vehicle sector. This probe adds a new layer to the existing tech-related tensions between Western countries and China, a significant trade partner for Europe and the world’s largest automotive market.

Chinese automakers are attracted to the European market, partly due to its relatively low auto import tariffs of 10%, compared to the U.S. tariff of 27.5%. Additionally, Europe has the world’s second-largest market for electric vehicle batteries, trailing only China. The tariff advantages and the green consciousness of European car buyers, who are less influenced by nationalist economic concerns, have contributed to the Chinese inroads into the European market.

John Kirkwood, a British retiree, replaced his Volkswagen Passat with an MG5 station wagon three years ago, largely due to its competitive pricing. The vehicle, priced at 30,000 pounds ($36,000), was a more economical choice compared to its closest competition, a Kia model costing significantly more.

Several Chinese companies, including MG owned by SAIC Motor and BYD backed by Warren Buffett, are expanding their market share in Europe. Other emerging players include NIO and Xpeng. While these companies currently hold only 3% of Western Europe’s total car market, they account for 8.4% of its electric vehicle market, a considerable increase from 6.2% in the previous year and virtually zero in 2019.

European policymakers are becoming increasingly alarmed. European Commission President Ursula von der Leyen voiced concerns that global markets are now awash with less expensive Chinese electric vehicles, their prices subsidized by the Chinese government. The Commission has formally launched an investigation that could result in additional import duties and is expected to conclude within 13 months.

The Chinese government has criticized the EU’s probe as baseless and contrary to World Trade Organization guidelines, insisting that they will rigorously defend the rights of Chinese firms.

The situation is further complicated by the fact that global brands like BMW and Tesla also export vehicles manufactured in China to Europe. Thus, one in every five electric vehicles sold in Europe currently originates from China, regardless of the brand.

Stellantis, the parent company of Peugeot, Citroen, Alfa Romeo, and Fiat, is among those gearing up to counteract the rise of Chinese electric vehicles in Europe. The company has announced plans to introduce a new, budget-friendly Citroen e-C3 to tackle the competition.

Auto analyst Matthias Schmidt points out that part of the Chinese success comes from their earlier collaborations with Western automakers. The technical know-how they gained then is now being employed to create compelling alternatives to European brands. The transition to electric vehicles, which are less complex to manufacture than their internal combustion counterparts, has also benefited the Chinese companies, enabling them to challenge established European brands with a significantly lower operational scale.

As Europe finds itself at a crossroads in the global green technology race, Chinese electric vehicle makers are striving to differentiate themselves. Great Wall Motors’ EV sub-brand, Ora, for example, is specifically targeting female customers with cars designed to meet their particular needs. The competitive price points and unique designs are drawing customers like British scriptwriter Justin Nicholls, who finds Chinese cars “more quirky” compared to the European ones, further signifying the challenges Europe faces as it transitions to a more sustainable automotive future.

Frequently Asked Questions (FAQs) about Chinese electric vehicles in Europe

More about Chinese electric vehicles in Europe

• European Union’s Investigation into Chinese EV Subsidies
• Chinese Automakers in Europe: Market Share and Growth
• Competitive Landscape of the Electric Vehicle Market in Europe
• Transition from Fossil Fuels to Electric in European Auto Industry
• Tariff Differences between U.S. and Europe for Auto Imports