Electric car production: China is taking over the market

China continues to impress with its achievements in the automotive industry taking over the market in Europe. It is reaching new heights and is rapidly moving the world leaders in this niche. China is gradually flooding the market, offering more and more new models of cars that are becoming worthy competitors in the automotive industry, which makes us think about the future of the auto industry and the prospects for its development. We can only watch how events will develop.

The automotive industry is in a state of upheaval. And not only because of the transition to electric cars, but also because the center of its influence is moving. And not to the US or Japan, or even Korea, which has come to the fore in recent years, but to China.

According to the independent organization Transport&Environment (T&E), Chinese-made electric cars will occupy a quarter of the European electric car market in 2024, compared to 19.5% in 2023. Of course, the 25% tariffs that Europe is considering eliminating will make mid-size sedans and SUVs more expensive than European models, but compact SUVs and larger cars from China will remain cheaper, according to the T&E study.

Lower costs

China's competitiveness stems from its highly organized industry and, in particular, its ownership of the value chain. For example, lithium-ion battery cells are "at least 20%" cheaper than those made in Europe. The affordability of manufactured materials also affects the overall pricing of cars, which means more people will be able to afford such cars and is one of the reasons why China's electric car market is taking off.  

Moreover, if Europe abolishes customs duties, it won't last long, simply because, like the Japanese in their time, the Chinese plan to build factories on our soil, which will automatically negate these import taxes. BYD is already planning to build in Hungary, and Leapmotor will utilize Stellantis' facilities in Poland.

Chinese brands are making rapid progress

Of course, until recently, some electric cars sold in Europe and assembled in China were European: models from BMW (notably the iX3), Dacia (Spring) and Tesla (Model 3). But even here the wheel is turning, and according to T&E, Chinese brands will capture 11% of the European market by 2024, with that share rising to 20% by 2027. China is increasingly flooding the electric car market with its presence and it's as if it's not even giving strong competitors in the industry a chance.

Chinese manufacturers

According to T&E, the only solution is for European authorities to push their automakers to the next stage - and to do so by subsidizing them, as the Chinese government does for its manufacturers. This would be "the only way for EU carmakers to compete with Chinese brands," the organization's research says.

And T&E goes even further, suggesting that Europe should consider imposing "tariffs on battery cells." Compared to the US and China, the EU currently has the lowest tariffs on battery cells. In this regard, Europe is gradually becoming organized and will open a number of factories in the next few years to produce batteries, a central component of the electric car. By producing locally and taxing Chinese cells, Europe can become more competitive and create (or retain) jobs.

As we have already seen, China is taking over the electric model market and is slowly asserting its claim to primacy, buoyed by its mobility in quickly picking up on trends and at the same time cheap material prices compared to other countries, which clearly gives China an advantage over buyers who will eagerly seize the opportunity to move to the car of the future - the electric car.