Chinese EV expansion in Europe expands

author: FutureCar Staff    

The Chinese push into Europe's electric vehicle (EV) market is growing at an unprecedented rate, as Chinese manufacturers increase their exports to the continent. Brands such as BYD, XPENG, NIO, MG, and Polestar are leading the charge in importing their EVs into Europe.

A report published by ABI Research in July 2023 predicts that the European Union (EU) will import 1.2 million Chinese-manufactured battery electric vehicles (BEV) by 2030. This surge in imports is fueled by China's strong focus on its EV industry, with BEVs already accounting for 24% of all car sales in the country as of May 2023.

Chinese companies currently hold a significant market share in battery manufacturing, estimated at 56%. This dominance positions China to have a lasting impact on the global EV industry.

Dylan Khoo, an Industry Analyst at ABI Research, believes that Chinese BEVs will continue to gain traction in Europe due to the experience and focus of Chinese manufacturers on EVs. They offer competitive pricing and quality across various segments, making them appealing to European customers. Chinese-owned brands like MG and Polestar have already established a presence in the European market and have seen success with their models imported from China.

The Chinese push into Europe has also led to a shift in the trade flow of car imports and exports. Since 2018, exports of European cars to China have slightly decreased, while imports of Chinese cars into the EU have grown nearly fourfold. China has become the largest importer of cars into the EU, with 28% of its BEVs coming from China.

On the other hand, Western auto manufacturers still rely on China as an exporting base. Companies like Tesla and BMW produce vehicles and parts in Chinese factories before importing them back into the EU. For example, 40% of cars made in Tesla's Giga Shanghai factory are exported, making up 80% of Teslas in Europe. BMW exclusively produces its iX3 model in China for sales in both the local and European markets.

The motivations behind the Chinese push into Europe include overcapacity, economic slowdown, and intense competition in the domestic market. Chinese OEMs are seeking overseas markets like Europe, where there is high demand for EVs and fewer protectionist measures. This trend will disrupt the European automotive supply chain as both Chinese brands expand into Europe and Western OEMs establish production capacity in China for export to Europe.

The growing presence of Chinese EVs in Europe signifies a significant shift in the global automotive industry. As Chinese manufacturers continue to innovate and expand their reach, the competition and collaboration between Chinese and Western companies will shape the future of the EV market.

FutureCar Staff