China-manufactured electric vehicles are set to constitute more than a quarter of all electric vehicle sales in Europe this year, marking a 5% increase from the previous year, according to a recent policy analysis.
The share of Chinese electric vehicles in the EU market is expected to rise to just over 25% in 2024, with Chinese brands such as BYD playing a significant role in this growth.
While Western brands like Tesla currently dominate the electric vehicle market in the EU, accounting for most of the sales, Chinese brands are projected to capture 11% of the market by 2024 and potentially up to 20% by 2027.
This growth has raised concerns, leading the European Commission to investigate subsidies given to Chinese electric vehicle manufacturers to determine if they unfairly undercut local companies.
To address the challenges posed by the increasing dominance of Chinese electric vehicles in the EU market, T&E suggests raising tariffs on Chinese electric vehicles.
However, this would require Europe to improve its own battery cell production for electric vehicles.
In response to these challenges, Chinese manufacturers like Tesla and BYD are ramping up their manufacturing efforts in Europe, with Tesla looking to expand its assembly plant in Germany and BYD planning to build a factory in Hungary.
T&E emphasizes the importance of localizing electric vehicle supply chains in Europe while accelerating the transition to electric vehicles to maximize economic and climate benefits.