Chinese EV expansion in Europe surges

author: FutureCar Staff    

The Chinese electric vehicle (EV) industry is making significant strides in 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 into Europe. According to a report by ABI Research, it is estimated that the European Union will import 1.2 million Chinese-manufactured battery electric vehicles (BEVs) by 2030.

In China, BEVs already account for 24% of all car sales as of May 2023. Chinese companies also hold a majority market share of 56% in battery manufacturing. This dominance is expected to continue growing, as Chinese manufacturers have more experience and focus on EVs compared to their European counterparts. Dylan Khoo, an industry analyst at ABI Research, believes that this expertise and competitive pricing will lead to a greater import of Chinese BEVs into Europe.

Furthermore, the Chinese push into Europe has caused 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 into the EU has increased nearly fourfold. 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 utilize China as an exporting base. Companies like Tesla and BMW produce cars and parts in Chinese factories before importing them back into Europe. For example, 40% of the cars made in Tesla's Giga Shanghai factory are exported, accounting for 80% of Teslas in Europe. BMW exclusively produces its iX3 model in China, which sees significant sales both locally and in Europe.

The Chinese manufacturers' push into Europe is driven by factors such as overcapacity, an economic slowdown, and a highly competitive domestic market. They view Europe as a lucrative market with high demand for EVs and fewer protectionist measures. This disruption in the European automotive supply chain is occurring from two directions: Chinese brands expanding into Europe and Western manufacturers building production capacity in China for export to Europe.

Overall, the Chinese EV industry's expansion into Europe is reshaping the market and challenging the dominance of traditional Western manufacturers. With their expertise, competitive pricing, and growing market share, Chinese manufacturers are poised to make a significant impact on the European EV market in the coming years.

FutureCar Staff