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Chinese electric vehicles set to take 25% of European market in 2024

Chinese electric vehicles set to take 25% of European market in 2024

As many as one in four electric vehicles (EVs) sold in Europe could be Chinese imports by the end of 2024, according to a new analysis by Transport and Environment (T&E). The proportion of EVs sold in Europe but made in China was nearly 20% in 2023 and is set to get higher, the non-governmental group has found. It could reach 25% by the end of this year.

European domination waning

Furthermore, T&E says, until now, EV imports have been dominated by European brands, such as BMW, Dacia and Tesla, manufacturing in China and then importing. In 2024 however, Chinese brands could take up to 11% of the market, reaching up to 20% by 2027.

That projection is based on the Chinese market share over the last two years and presupposes a linear trend, but the slice of the EV market taken by the Chinese could be even higher if the country’s manufacturers meet planned targets. Chinese manufacturer BYD alone is aiming for 5% by 2025.

© T&E

Possible import tariffs

One riposte being considered by European Union (EU) legislators is the introduction of trade tariffs on EV imports. Imposing import tariffs on car companies who are not manufacturing in Europe will create an incentive for those firms to bring their production lines back to EU countries.

Tariffs will force carmakers to localise EV production in Europe, and that’s a good thing because we want those jobs and skills.

Julia Poliscanova, senior director for vehicles and e-mobility supply chains at T&E

© T&E

In addition, tariffs would rob the Chinese of their edge on pricing when it comes to their medium-sized sedans and SUVs that currently sell far more cheaply than European legacy brands. Bringing the price of Chinese-branded vehicles up would make consumers think twice about price-quality issues and make trusted European manufacturing seem better value. Smaller vehicles would remain cheaper than their European counterparts, it is predicted.

Car industry needs to be ready

Nonetheless, T&E points out, legislators cannot protect EV manufacturers forever. “Tariffs won’t shield legacy carmakers for long,” Poliscanova added. “Chinese companies will build factories in Europe and when that happens our car industry needs to be ready.”

Part of that readiness should include changes to regulatory frameworks to boost EV production, T&E suggests. This could mean the introduction of EV goals for companies who operate car fleets as well as a concerted industrial push on lithium-ion battery production. The Chinese have pulled ahead on this technology and can supply batteries 20% more cheaply than Europe, while the US has heavily subsidised the sector. The EU needs to follow suit, T&E’s analysis says, with “Made in Europe” targets and subsidies to drive local battery manufacturing.