The Rise of Chinese Automakers in the European EV Market

Chinese automakers are quickly establishing their presence in the European electric vehicle (EV) market, raising concerns among European carmakers and policymakers. China’s success in dominating the EV supply chain, from mining battery metals to producing electric cars, has been remarkable in just over a decade.

The European Union (EU) is particularly concerned about the impact of Chinese EVs on its market. China’s vehicle exports to Europe have surpassed those of South Korea, Germany, and Japan, with a total of 2.8 million vehicles exported in the first 7 months of 2023. Chinese EVs have captured a significant share of Europe’s EV market, accounting for 19% of all gigawatt-hours delivered to EV buyers in the region.

One of the reasons for China’s success is its ability to offer affordable and technologically advanced electric cars. Chinese automaker BYD’s Song Plus DM-i plug-in hybrid, with a range of 1,000 km, is a best-seller in China with a price tag of just $27,000. European car buyers, struggling with energy crises, are attracted to the long-range capabilities and advanced features of Chinese EVs.

However, the rise of Chinese automakers in Europe has raised concerns about fair competition and predatory practices. The European Commission is considering imposing tariffs on Chinese EVs, but this could lead to higher prices and limited vehicle choices for European consumers.

From a supply chain perspective, China’s exports of battery metals to Europe have also seen significant growth. China has exported over 8,000 tonnes of lithium carbonate equivalent, 13,000 tonnes of graphite, 6,000 tonnes of nickel, and 1,300 tonnes of manganese to Europe for use in EV batteries. This reliance on Chinese battery metals further complicates the EU’s response to Chinese EVs.

As the EU grapples with its strategy to protect its car industry from Chinese competition, it must carefully consider the impact on consumers, the supply chain, and its overall decarbonization goals. The rise of Chinese automakers in the European EV market is forcing the EU to evaluate its policies and find a balance between fair competition and sustainable electrification.

– Original article “EU-Chinese EV spat exposes vulnerabilities”
– European Green Deal (EGD)
– $430 billion-plus Inflation Reduction Act (IRA)
– Adamas Intelligence