The European automotive sector is afraid of Chinese domination (REPORT)

Luc Williams

Chinese monopoly on the EV market in 2035?

The latest report “MotoBarometer 2024. Mood in the automotive industry in Europe” by Exact x Forestall shows that 53 percent representatives of the Polish automotive industry indicate that in 2035, when it will no longer be possible to sell combustion-powered cars, the Chinese manufacturer will be the leader in sales of electric cars in Europe. Similar forecasts are made by respondents in Germany – 45% and Spain – 54%. or in Hungary – 59 percent. This was the opinion of the majority of respondents in 9 out of 11 countries surveyed.

European car and parts producers also overwhelmingly support further tariff increases introduced by the European Commission. In Poland, 66 percent think so. respondents, and 73 percent wants further steps to stop the inflow of Chinese electric vehicles into Europe.

Potential effects of customs tariffs in the European Union

Exact x Forestall (formerly Exact Systems) experts point out, however, that the long-term effects of such actions may be counterproductive: Chinese factories will be established in Europe, relations between Beijing and Brussels will deteriorate, and European manufacturers will sell fewer and fewer of their models in Middle Kingdom.

According to data from JATO Dynamics, cited by the authors of the report, the leader in sales of electric cars in the EU in the first half of this year. was the Volkswagen Group (178,000 registered new EVs, (14% decline y/y). In second place was the BMW Group with a 10% share in the European EV market. Chinese brands are doing better and better in Europe, whose share in total EV sales in the first half of this year was 7.4% (6% a year earlier). In total, Europeans bought 70,000 Chinese EVs, which means a 26% increase year-on-year.

Decline in sales of electric cars in the EU

“Electromobility, which was supposed to give the European automotive a boost, is not only not gaining new drivers, but its share in the total sales of new cars is decreasing year on year. As reported by ACEA, the share of fully electric cars in the total number of new car registrations in the European Union in in the first part of this year decreased to 12.5% ​​from 12.9% a year ago. In Poland, the trend is similar, but the result is much worse – electric cars constitute only 3.2% of all new passenger cars,” said the president of the management board of Exact x Forestall Jacek Opala.

In his opinion, the poor sales results of electric cars are due to the insufficiently developed charging infrastructure, high prices of electric cars and ending government subsidy programs. As Opala pointed out, the results of the MotoBarometer study should encourage the European automotive sector to develop specific strategies that will allow for effective competition.

Support for tariffs on Chinese cars in the EU

The authors of the report recalled that the European Union, recognizing the threat associated with the dynamic growth of Chinese producers, introduced temporary tariffs on Chinese electric cars in 2024. In 9 out of 11 countries, the majority of respondents believe that the European Commission’s introduction of further tariff increases on electric cars imported from China is a good solution. In Poland, 66 percent respondents support such support for the European automotive industry. The same result was obtained in Germany. In Turkey, 54% of people expressed this opinion, and in France, 73%. Only in Slovakia and Hungary less than half of respondents held this opinion – 48 and 46 percent, respectively.

In the opinion of the authors of the report, customs duties may unfortunately also have negative consequences. The most serious of them – in the opinion of almost half (46%) of representatives of the Polish automotive industry – may be the relocation of factories of Chinese manufacturers to Europe. 39 percent respondents are afraid of the deterioration of relations between Beijing and Brussels, and 37 percent points to even higher prices of cars from European manufacturers due to higher prices of parts from Chinese suppliers. Almost every third Polish respondent fears that ultimately the tariffs will delay, not accelerate, the development of European electromobility.

New production plants of Chinese manufacturers in Europe

“New factories of Chinese manufacturers located in European countries may have a bittersweet taste. On the one hand, countries such as Poland, the Czech Republic and Slovakia are seeking this type of investment because they mean new jobs, an inflow of know-how, and an increase in the importance of a given country in the automotive industry. supply chain. On the other hand, it is the best way for Chinese manufacturers to bypass customs duties, offer much cheaper cars than European models and gain an increasingly larger share of the European market. Ultimately, the price is the first criterion for choosing an electric car by a Polish or European driver, and this is an increasingly clear factor. Europe is losing, Opala said.

The study “MotoBarometer 2024. Moods in the automotive industry in Europe” was conducted by Exact x Forestall among representatives of companies from the automotive sector – including: car manufacturers, sub-suppliers of car parts and components. The sample size was 1,001 respondents from 11 countries – Poland, Belgium, Czech Republic, France, Spain, Germany, Portugal, Romania, Slovakia, Turkey and Hungary. The research was carried out using telephone interviews (CATI), online surveys and individual surveys from June to July this year. (PAP)

About LUC WILLIAMS

Luc's expertise lies in assisting students from a myriad of disciplines to refine and enhance their thesis work with clarity and impact. His methodical approach and the knack for simplifying complex information make him an invaluable ally for any thesis writer.