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Jun 4, 2024, 10:01am EDT
Europe
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Semafor Signals

Why Chinese EV sales have exploded in Europe

Insights from Nikkei Asia, Wood Mackenzie, and Chatham House

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The BYD store in Milan.
Reuters/Claudia Greco
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The News

One in five of all electric vehicle imports to Europe in the first four months of 2024 were made in China, according to car sales tracking data reported in the Financial Times. European sales of Chinese EVs jumped by 23% in the first four months of the year compared to the same period in 2023. Between January and April, 119,300 Chinese EVs were registered in the UK and western Europe.

Europe has imposed far lower tariffs on Chinese EV imports than the US, 10% compared to 100%, however lawmakers in the bloc have opened an investigation into the imports that could curb them in the future.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Low prices and jazzy features make Chinese EVs an attractive buy

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Sources:  
Nikkei Asia, NPR, The Financial Times

Chinese EVs are significantly cheaper than European ones and offer more features as standard. In 2023, the average price of a European EV was about $50,000, while a similar vehicle made by Chinese carmaker BYD cost around $32,000. Part of the reason why is to do with domestic trends in China: There, consumers are “more discerning” and care more about style and technology, an analyst told NPR, pushing China’s automakers to add special features like assisted driving to cars. But despite the growth, European consumers still have limited awareness of Chinese brands, which one HSBC analyst told the FT may slow China’s gains.

Europe and the US need China’s green tech to transition from fossil fuels

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Sources:  
Nikkei Asia, Wood Mackenzie

While Europe and the US have introduced measures to curb Chinese EV imports, a green-energy transition without China would prove difficult, analysts said. China dominates the global green tech market: Energy intelligence firm Wood Mackenzie estimates that in 2023, China installed more than double the solar panels than the US and Europe combined. Europe lacks both the capital and the technical ability to face the transition alone, an analyst told Nikkei Asia. And without China, the cost reduction of renewable energy sources that we’ve become accustomed to in the past decade would end, Wood Mackenzie warned.

Europe is a ‘critical market’ for China as it focuses on exports

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Source:  
Chatham House

Economically, China is going through a “painful” but “necessary” transition as it moves away from relying on the property sector for growth to focus more on high-end manufacturing exports, like lithium batteries, solar panels, and EVs, a China researcher wrote for UK policy institute Chatham House. Europe is a “critical market” for the export of these goods. But the concerns of European policymakers about competition with local manufacturers and potential job losses stemming from that will continue to be a point of tension, the analyst warned.

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