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A Threat to Tesla? – Chinese Electric Cars Pile Up in German Ports – Is a Price Crash Imminent

A Threat to Tesla? - Chinese Electric Cars Pile Up in German Ports – Is a Price Crash Imminent

Chinese car manufacturers arrived in Europe with high expectations. After early failures like Landwind, Brilliance, or Borgward, the transition to e-mobility has given China a renewed opportunity to launch a large-scale offensive in Germany. This is an area where China is a global frontrunner, and the green economic policies of the EU, including the ban on combustion engines, generous subsidies, and tax breaks for e-mobility, are playing into the hands of the Chinese.

Chinese Cars Parked in Ports, Tires Losing Air

However, it appears that this is not enough. The registration figures of Chinese car manufacturers in Germany are decidedly poor, as the latest data from the Federal Motor Transport Authority (KBA) for the first quarter of 2024 show:

The Aiways brand is virtually dead. According to official data, there was only one (!) new vehicle registered from January to March.

BYD (Build Your Dreams) managed a staggering growth rate of 514 percent year on year. But this figure is deceptive. The absolute numbers show that the hype surrounding BYD is currently unfounded: only just under 400 cars were registered in the first quarter.

Great Wall Motors, Lynk & Co., Nio, or Polestar also play tiny roles in the market.

The only exception is MG: The electric and hybrid SUVs from the MG Roewe Group, which has been active in Europe for years, were registered almost 4500 times in the first quarter of 2024, an increase of 16 percent.

«Significantly More Vehicles than 2021 and 2022»

There is no sign yet of the big wave that is supposedly about to hit German, Korean, French, or Japanese car manufacturers in Germany. Instead, a completely different picture is emerging. Thousands of new vehicles are blocking European ports, as reported by the Automobilwoche magazine, among others. In addition to a shortage of truck drivers for onward transport, there is another obvious reason that insiders do not deny. Many cars have been ordered from China by dealers but remain unsold, and they are now being temporarily parked in the ports. «This situation is currently affecting all European ports where large quantities of vehicles arrive,» said Gert Ickx, spokesperson for the management of the Belgian ports of Antwerp and Zeebrugge. The port authorities did not provide exact figures, but according to Automobilwoche, the port is currently handling significantly more vehicles than in 2020 and 2021. The early end to the electric car purchase premium has also contributed to this. «That’s why electric cars are staying in the ports longer. This affects imported electric cars of all brands,» Automobilwoche quotes a logistics expert as saying.

Beware of Electric Cars After Long Downtimes

According to various media reports, the vehicles are sometimes parked for 18 months before they are transported onward. This could be problematic for electric cars, as the battery can suffer damage and lose some of its capacity if it is not charged during this time, depending on the initial condition and outside temperature.

But what does this mean for the growth of Chinese manufacturers as car exporters outside their heavily subsidized home market? After all, the ban on combustion engines in 2035 is drawing closer. Many car manufacturers, such as Opel or VW, will soon be throwing all petrol, diesel, and hybrid models out of their range, and the sales market for electric cars is likely to grow strongly again in the medium term.

3.6 Billion for BYD – How China’s Car Manufacturers are Funded by the Dictatorship in Beijing

The current situation could therefore be more than just a breather for VW, Renault, Hyundai, and Co. when looking at the growth plans of Chinese car manufacturers. In a recent analysis, the Kiel Institute for the World Economy (IfW) has listed the huge sums that the dictatorship in Beijing is spending on the expansion of its car manufacturers:

Between 2018 and 2022, BYD, China’s largest electric car manufacturer and a tough competitor for Tesla, VW, and Co. not only in the Chinese market, received direct government support amounting to 3.4 billion euro ($4.08 billion). «This reflects BYD’s rapidly expanding technology and production capacities and its increasing competitiveness,» says the IfW.

«In relation to sales, this corresponds to an increase in direct subsidies from 1.1 percent in 2020 to 3.5 percent in 2022. In addition, BYD receives far more purchase premiums for electric cars in China than all other domestic manufacturers such as GAC or foreign companies producing locally, such as Tesla or the joint ventures of VW,» says Dirk Dohse, Research Director at the IfW Kiel.

Access to Raw Materials and Expedited Procurement Procedures

This is not only about direct support in the form of subsidies or purchase premiums. While the EU has only just dumped an enormous amount of red tape onto companies with its new supply chain law, the opposite is happening in China. «In combination with other support measures, such as preferred access to critical raw materials, a technology transfer sometimes forced on foreign investors, and preferential treatment in public procurement and administrative procedures, Chinese companies have been able to expand very quickly in many green technology areas, dominate the Chinese market, and increasingly penetrate EU markets,» the IfW study continues.

Remarkably, even in the electric-friendly China, new battery models apparently cannot be sold to the desired extent without subsidies. Because a few years ago, China wanted to cut the purchase premiums, assuming that e-mobility would no longer need them.

China Continues to Push – With Electric Cars, Hybrids, and Combustion Engines

Apparently, this is not the case – and the current drive strategy of the Chinese also provides for research and development in the field of alternative fuels such as e-fuels, methanol, or biofuels in addition to the expansion of battery sovereignty. China’s car manufacturers will therefore not only squeeze VW and Co. with electric cars, but also with combustion engines; especially with plug-in hybrids, which are still recording a tremendous increase in new registrations in China, unlike Germany. The EU Commission has now identified a supposed lifeline for European electric car manufacturers: It has initiated a competition investigation into state support for electric car manufacturers in China. Such a competition investigation could, for example, lead to tariffs on imported cars.

Last Resort Tariffs? Risk for the EU is High

However, this would particularly endanger the German manufacturers and their involvement in China, warned several experts in response to this announcement, among them Jochen Siebert from JPW Asia: «If China were to react with tariffs or similar measures, it would hit the German manufacturers hard. Because they import many expensive and therefore highly profitable vehicles worth more than 100,000 euro ($120,000) to China, like the 7 Series BMW, Rolls-Royce, or Maybach. Even with smaller models like the 5 Series BMW, the top models are not always produced in China. Porsche has no production facilities at all locally, so it would be fully hit by tariffs,» Siebert told FOCUS online.

The authors of the IfW study also view tariffs critically and recommend negotiations. They advise the EU to «enter into negotiations with the government in Beijing as part of the recently initiated anti-subsidy proceedings against imports of electric vehicles from China in order to persuade it to abolish subsidies that are particularly harmful to the EU.»

Electric Car Buyers Likely Expect the Next Price Slump

For car buyers who are considering a cheap electric car, it might well be worth waiting. Because the current slump is forcing the Chinese to lower prices – if only to not upset the dealers who have already been recruited in large numbers and who were hoping to get a kind of second Hyundai or Kia on board in the shape of BYD, Nio, or Great Wall. So, the prices for electric cars are likely to continue to fall – big discounts are to be expected.


In addition, a Chinese car is still a no-name product in Germany, which also has an impact on the residual value. Michael Gerstner, Senior Analyst at the residual value analysts Bähr & Fess Forecasts, explains the Chinese’s dilemma: «Chinese manufacturers who pursue a low-price strategy must expect lower residual values compared to the established competition. As a result, the enormous price advantage at the time of purchase is offset by lower proceeds from the resale.» This effect is likely to intensify drastically in the future – and paradoxically, because electric cars are getting better and better, the first Chinese manufacturers such as Nio have already announced the market launch of new models with a range of up to 1000 kilometers. Older models with shorter ranges are of course much harder to sell overnight, which also increases the pressure for discounts.

VW Calls for Bans and New Premiums

So it’s no wonder then that manufacturers who are also focusing 100 percent on the electric car and are abandoning the combustion business, which still dominates in Europe, are now calling for help from the state – or rather the taxpayer. In a recent interview with the dpa, VW’s works council chairwoman, Daniela Cavallo, defended the EU’s ban policy on combustion engines and at the same time demanded new subsidies: «Politics must also support this, not just set requirements that are correct,» Cavallo said. For buyers of electric cars, however, the price is ultimately decisive, especially in view of the dramatically poor residual value prospects of an electric car. And for many buyers, there might be no reason not to prefer a Chinese bargain to a VW – especially in leasing, where the residual value risk is already factored in, and the lessee can simply trade in the car for a better electric car after three or four years.