Chinese EV expansion in Europe accelerates
【Summary】Chinese electric vehicle manufacturers are increasingly exporting their EVs to Europe, surpassing European manufacturers in terms of experience and focus on EVs. Chinese brands such as BYD, XPENG, and NIO, along with MG and Polestar, are importing their EVs into Europe. It is estimated that by 2030, the European Union will import 1.2 million Chinese-manufactured battery electric vehicles.
The Chinese electric vehicle (EV) industry is making significant inroads into Europe, with Chinese manufacturers exporting more EVs than ever before. Brands such as BYD, XPENG, NIO, MG, and Polestar are leading the charge in importing their EVs to Europe, according to a report published by ABI Research in July 2023. The report estimates that by 2030, the European Union (EU) will import 1.2 million Chinese-manufactured battery electric vehicles (BEVs).
In China, BEVs already account for 24% of all car sales as of May 2023. With Chinese companies holding a 56% market share in battery manufacturing, their influence on the industry is set to continue growing. Dylan Khoo, an Industry Analyst at ABI Research, believes that the experience and focus of Chinese manufacturers on EVs will lead to a greater import of Chinese BEVs compared to European manufacturers.
Chinese-owned brands like MG and Polestar have already established a presence in the European market and are selling well. This push into Europe is also causing a reversal in the trade flow of car imports and exports. Since 2018, exports of European cars to China have slightly declined, while the import of Chinese cars to the EU has grown nearly four times. China has now become the largest importer of cars into the EU, with 28% of its BEVs coming from China.
However, Western auto manufacturers still use China as an exporting base, producing cars and parts in overseas factories before importing them back into the EU. For example, 40% of the cars made in Tesla's Giga Shanghai factory are exported, making up 80% of Teslas in Europe. BMW also exclusively produces its iX3 model in China for sales both locally and in Europe.
According to Khoo, Chinese OEMs are exploring overseas sales due to overcapacity, economic slowdown, and a highly competitive automotive market at home. They see Europe as a lucrative market with a high demand for EVs and fewer protectionist measures. This influx of Chinese brands into Europe, along with Western OEMs building production capacity in China for export to Europe, will disrupt the European automotive supply chain from both directions.
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