Chinese EV expansion in Europe increases

author: FutureCar Staff    

The Chinese electric vehicle (EV) industry is making significant strides in Europe, with Chinese manufacturers exporting EVs to the continent in greater numbers than ever before. Brands such as BYD, XPENG, NIO, MG, and Polestar are leading the charge in expanding the import of their EVs across Europe.

A report published in July 2023 by ABI Research predicts that by 2030, the European Union (EU) will import around 1.2 million Chinese-manufactured battery electric vehicles (BEVs). This highlights China's growing focus on the EV industry and its increasing influence in Europe.

As of May 2023, BEVs account for 24% of all car sales in China, with Chinese companies holding a 56% market share in battery manufacturing. This dominance in the industry positions Chinese manufacturers as more experienced and focused on EVs compared to their European counterparts.

Dylan Khoo, an Industry Analyst at ABI Research, believes that the expertise and dedication of Chinese disruptors in the EV market will lead to a greater import of Chinese BEVs into Europe. These Chinese-owned brands, such as MG and Polestar, have already established a presence in the European market and are successfully selling their models imported from China.

The Chinese push into Europe is also causing a shift 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 into the EU has grown nearly fourfold. China has now become the largest importer of cars into the EU, with 28% of its BEVs coming from China.

Despite this, Western auto manufacturers still use China as an exporting base, producing cars and parts in overseas factories before importing them back into the EU. Tesla, for example, exports 40% of the cars made in its Giga Shanghai factory, which make up 80% of Teslas sold in Europe. BMW also exclusively produces its iX3 model in China, catering to both local and European sales.

According to Khoo, Chinese OEMs are looking overseas for sales due to overcapacity, economic slowdown, and intense competition in the domestic automotive market. They see Europe as a lucrative market with high demand for EVs and fewer protectionist measures. This influx of Chinese brands into Europe, combined with Western OEMs building production capacity in China for export to Europe, will disrupt the European automotive supply chain from both directions.

The Chinese electric vehicle industry's expansion into Europe presents new opportunities and challenges for the market. As the competition intensifies, consumers can expect a wider range of affordable and high-quality EV options, while manufacturers will need to adapt to the changing dynamics of the global automotive industry.

FutureCar Staff