Chinese EV expansion in Europe

author: FutureCar Staff    

Chinese manufacturers are making a significant push into the European electric vehicle (EV) market, exporting more EVs than ever before, according to recent research. Brands like BYD, XPENG, NIO, MG, and Polestar are increasing the import of their EVs across Europe. A report by ABI Research predicts that the European Union (EU) will import around 1.2 million Chinese-manufactured battery electric vehicles (BEV) by 2030.

Currently, BEVs account for 24% of all car sales in China as of May 2023. With Chinese companies holding a 56% market share in battery manufacturing, their influence in the industry is expected to continue growing. Dylan Khoo, an Industry Analyst at ABI Research, believes that this focus on EVs by Chinese manufacturers, compared to their European counterparts, will lead to a greater import of Chinese BEVs. Chinese-owned brands like MG and Polestar, which have already been in the market for some time, are experiencing successful sales of their models imported from China.

China's expansion into the European market is also causing a shift in the trade flow of car imports and exports. Since 2018, exports of European cars to China have slightly decreased, 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 originating 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 produced in Tesla's Giga Shanghai factory are exported, accounting for 80% of Teslas in Europe. Similarly, BMW exclusively manufactures its iX3 model in China, for both local and European sales. Khoo explains that Chinese OEMs are looking overseas for sales due to overcapacity, economic slowdown, and intense competition in the domestic market. Europe, with its high demand for EVs and fewer protectionist measures, is seen as a lucrative market. This shift in the automotive supply chain will be disrupted from two directions: Chinese brands expanding into Europe and Western OEMs building production capacity in China for export to Europe.

Overall, the Chinese push into the European EV market is gaining momentum, with Chinese manufacturers capitalizing on their experience and focus on EVs, offering competitive pricing and quality across various segments. As the EV industry continues to grow, the dynamics of car imports and exports between China and Europe are undergoing significant changes.

FutureCar Staff