According to UBS analyst Paul Gong, Chinese electric vehicle (EV) manufacturers are poised to expand their global production footprint, with Europe being a top priority. Gong specifically highlighted BYD, the largest EV builder backed by Warren Buffett’s Berkshire Hathaway, as one of the Chinese automakers set to extend its reach beyond China. The vast size of the European market and its increasing adoption of EVs, projected to reach 100% of sales by 2035, will be a catalyst for Chinese EV makers’ global expansion.
UBS predicts that Chinese-made cars will control 33% of the global automotive market by 2030, up from 17% in 2022. Established international brands such as Volkswagen and Toyota, which predominantly produce petrol vehicles, will likely experience a decline in market share, falling to a combined 58% of global sales by 2030. Elon Musk’s Tesla, on the other hand, is projected to hold an 8% market share worldwide by 2030, quadruple its current 2%.
The European Commission’s launch of an anti-subsidy investigation into Chinese-made EVs may result in higher tariffs than the standard 10%. However, the assessment process could take up to 13 months. Meanwhile, a UBS teardown report demonstrates that BYD’s pure electric Seal sedan has a production advantage over Tesla’s Model 3 assembled in China. The report states that the cost of building a Seal, a potential rival to the Model 3, is 15% lower.
UBS forecasts that by 2030, Chinese automakers will capture a 20% share of the European market, roughly 2 million units, with most vehicles being battery-powered. However, a potential punitive tariff imposed on Chinese EVs in Europe could disrupt the global automotive industry, prompting retaliation from Beijing against European automakers like BMW and Mercedes-Benz.
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