The Rise of Chinese Electric Vehicles in Europe: The Story Behind the Surge in Sales

The Rise of Chinese Electric Vehicles in Europe: The Story Behind the Surge in SalesJune 2023 saw Chinese car manufacturers achieve a record-high market share of 11% in Europe's electric vehicle market, a clear indication of the rising influence of Chinese EVs in the global market. This growth is a result of several contributing factors, including a pre-tariff buying spree in anticipation of new EU tariffs on Chinese EV imports and government subsidies in European countries

The Rise of Chinese Electric Vehicles in Europe: The Story Behind the Surge in Sales

June 2023 saw Chinese car manufacturers achieve a record-high market share of 11% in Europe's electric vehicle market, a clear indication of the rising influence of Chinese EVs in the global market. This growth is a result of several contributing factors, including a pre-tariff buying spree in anticipation of new EU tariffs on Chinese EV imports and government subsidies in European countries.

Pre-Tariff Buying Spree: A Rapid Market Response

June witnessed a strong growth in Europe's EV market. Around 23,000 pure electric cars were registered, including in the UK, marking a 72% increase from the previous month. This data reflects consumers' eagerness to purchase before the new EU tariffs on Chinese EV imports came into effect.

Dataforce's analysis revealed that SAIC Motor, the parent company of MG, a British brand, experienced the largest sales increase in June. Notably, 40% of the vehicles were registered by dealers rather than individual owners, further confirming the pre-tariff buying spree.

SAIC Motor achieved nearly 13,400 sales in Europe in June, while BYD reached almost 4,000 sales, encompassing the Dolphin and Seal models. It's noteworthy that the temporary EU tariffs imposed on SAIC Motor-manufactured EVs were the highest, reaching 38%, while BYD EVs were subjected to a 17% tariff.

European Government Subsidies: Boosting Market Development

Alongside the tariff factor, government subsidies in European countries have also fueled the rapid development of the EV market. Italy launched a 200 million car purchase subsidy program, which was fully claimed within nine hours of its launch, showcasing the enthusiastic response from consumers.

Rising Share of Chinese EV Exports

China's customs data reveals that the EU and UK markets accounted for nearly half of China's total EV exports in the first half of this year. The UK represented 12%, while the EU contributed 36%, starkly contrasting with the 100% tariff imposed by the US earlier this year on imported Chinese EVs.

Brazil and Australia tied for the third-largest market, each accounting for 7% of China's EV exports. Thailand, the UAE, and South Korea followed with 4% each, while Israel represented 3%.

Chinese EV Pricing in Europe Higher Than Domestic Market

Research by Spain's BBVA bank reveals that the price of Chinese-made EVs in Europe is typically double their domestic price. For instance, the entry-level BYD "Dolphin" model retails in the UK at slightly above 30,000, nearly triple its price in China. In comparison, the "Polestar 3" retails in the UK for 53,000, only 64% higher than its Chinese market price.

Germany, UK, and France Emerge as Major Markets for Chinese EVs

Germany, the UK, and France are the primary markets for Chinese EVs in Europe, followed by Norway, Belgium, and Italy. In June, out of the 208,872 pure electric cars sold in Europe, Germany recorded over 43,400 sales, although this represented an 18% decrease from the previous month. In the UK, EV sales increased by 7.4% to 34,000, while France experienced a 10% decline, just under 30,000 sales.

Significant Increase in Market Share for Chinese EV Manufacturers

Data from the European Automobile Manufacturers' Association (ACEA) indicates a significant surge in sales of Chinese-made pure EVs in Europe. This data excludes plug-in hybrids. In 2023, Chinese-made EVs, including Tesla and other EU brands manufactured in China, accounted for 21.7% of total EV sales in Europe, a substantial increase from 2.9% in 2020. ACEA data also reveals that Chinese brands account for 8% of this market share.

Conclusion: The Rise of Chinese EVs in Europe

The rapid rise of Chinese EVs in the European market is driven by a combination of factors: consumers' recognition of Chinese EV quality and value, government subsidies in European countries, and the proactive approach of Chinese car manufacturers. In the future, Chinese EVs are expected to maintain strong growth in the European market and play an increasingly prominent role in the global EV market.

It's important to note that the rise of Chinese EVs in Europe faces challenges, including tariff policy changes, competition from European brands, and consumer awareness of Chinese brands.

Furthermore, Chinese EV manufacturers must pay close attention to European market requirements concerning EV safety, range, charging infrastructure, and continuously improve product quality and service levels to achieve greater success in the European market.