Inicio EV Unsold Chinese EVs Are Piling Up At European Ports – CleanTechnica

Unsold Chinese EVs Are Piling Up At European Ports – CleanTechnica

Unsold Chinese EVs Are Piling Up At European Ports - CleanTechnica

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The threat of hordes of cheap EVs made in China has governments concerned in Europe and the US. So far, the US tariff on Chinese EVs stands at 27.5%, which has kept virtually all electric cars from China out of America. In February, Senator Josh Hawley, a card carrying MAGA Maniac, introduced a bill that would raise the tariff on EVs from China to 100 percent to protect US auto workers “from the existential threat posed by China.”

Europe has no corresponding tariff wall, although the European Commission is studying how to respond to an anticipated flood of cheap Chinese EVs. The lack of high import tariffs has encouraged Chinese manufacturers to look to Europe as a place where they can send boatloads (literally) of electric cars. BYD has placed its first ocean going car carrier into service and has plans for a fleet of similar ships.

Both Jalopnik and Quartz are citing a report by the Financial Times that claims Chinese manufacturers are sending more EVs to Europe than they can sell, which has led to thousands of them being parked at port facilities. The port operators are displeased because the glut of cars in interfering with other port activities. Some now say they are no longer ports but rather car parks for newly arrived Chinese EVs.

Chinese EVs Flooding European Ports

Officials representing the ports blame Chinese automakers for clogging their facilities with Chinese EVs by failing to arrange for their cars to be transported to dealerships after they arrive. According to executives representing the Port of Antwerp-Bruges, the busiest port for car imports for all of Europe, cars arrive at the port with nowhere to go. “Car distributors are increasingly using the port’s car parks as a depot. Instead of stocking the cars at the dealers, they are collected at the car terminal,” they told the Financial Times. According to supply chain experts and car industry executives on the ground, Chinese automakers aren’t selling their cars fast enough, with some cars spending up to 18 months before finding a buyer or being transported elsewhere.

China Passenger Car Association secretary-general Cui Dongshu told the Financial Times that booking inland shipping within Europe has been difficult for Chinese automakers. Additionally, he noted that the current “guerrilla warlike” car export strategy that Chinese automakers are practicing has the ability to throw themselves “into an unfavorable situation.”

What Cui is saying without directly offending the Chinese government is that Chinese manufacturers can’t sell all the cars they make in China and so are looking to Europe to absorb the excess. In other words they are knowingly producing more cars than they can sell and dumping the problem onto the shoulders of others. It’s enough to remind some people of the situation in this Sorcerer’s Apprentice scene in the Disney movie Fantasia.

Chinese EV Overproduction

The situation at the ports comes as automakers in China such as BYD, XPeng, and state owned SAIC increase their exports to Europe as part of an effort to keep their factories running and to capitalize on demand for low cost Chinese EVs in the region. The number of cars exported by Chinese manufacturers to Europe is 58% higher this year than last year, with most of the units making their way to ports in Belgium, the United Kingdom, Germany, and the Netherlands.

At a round table meeting with industry leaders in Paris on April 7, Chinese commerce minister Wang Wentao said that accusations of “overcapacity” were “groundless,” and also touted that innovation and “perfect” supply chains were behind their performance. However, the complete opposite can be seen on the ground in Europe’s port of entries. Brands like BYD are building teams in Europe from scratch and dealing with real world logistical challenges. Those working on those logistics issues noted that they have struggled to find haulage companies to prioritize their vehicles since Chinese EVs are newcomers to the European market.

Not Enough Trucks?

There appears to be a shortage of trucks and drivers available to move those Chinese EVs from the ports of entry to distributors or dealers inland. It seems trucking companies prefer to do business with customers they have a long term relationship with and give them priority when assigning trucks to various tasks. If you think there might be a whiff of anti-China sentiment involved as well, you probably aren’t wrong. One person familiar with the situation told The Street that “lack of trucks” was a common problem, as most were reserved for hauling vehicles from other brands like Tesla. “Any new brand will be facing this issue, if you don’t have scale, if you don’t have regular deliveries, then you are not the [trucking groups’] largest clients.”

Another part of the problem is that Germany ended its EV subsidy program at the end of 2023, which has slowed the sale of electric cars since then. BLG Logistics, the company that operates the car handling terminal at the German port of Bremerhaven, Europe’s second busiest port for vehicles, said it had experienced longer dwell times at its facilities after Germany’s federal government stopped subsidizing purchases of EVs in December of last year. China itself has pulled back on its own EV subsidies, which has slowed sales in China as well and put the squeeze on Chinese manufacturers.

Some Chinese EVs have been sitting in European ports for up to 18 months, while some ports had asked importers to provide proof of onward transport, according to industry executives. One car logistics expert said many of the unloaded vehicles were simply staying in the ports until they were sold to distributors or end users. “It’s chaos,” another person who had been briefed on the situation told Quartz.

The Takeaway

Chinese car companies could learn a lesson from the US Army, where a popular phrase is “Prior planning prevents piss poor performance.” The push by Chinese car companies into Europe has been chaotic. Normally when a car company wants to do business in another country, it does the ground work of establishing a dealer network where customers can come to test drive cars and learn more about them. Typically those dealers are also places where customers can expect to have their cars serviced and any warranty issues addressed.

The alternative is to sell cars online like Tesla does, but even it has service and delivery centers set up to distribute its products. What the Chinese companies seem to be doing is building as many cars as possible without taking demand into account. It reminds some observers of a time a few years ago when hundreds of thousands of perfectly good bicycles were discarded as bike sharing companies in China fought each other for market share with no regard for the consequences. Surely such a bone headed strategy would never be applied to the car business, would it? “We’ll see,” said the Zen master.

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