The European automotive industry faces a new landscape in its struggle to remain competitive against Chinese electric vehicle manufacturers.
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Following the imposition of tariffs by the European Unionsales of these vehicles from China have registered a notable decrease in the month of July, a fact that has generated various interpretations in the market.
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According to a recent analysis by Dataforcewho studied the figures of 16 EU member countriesregistrations of electric vehicles of Chinese brands, like BYD and MGfell a 45% compared to the month of June.
This decline has been attributed in the first instance to the implementation of the new tariffs, which, in some cases, such as that of MG, have raised the total cost of the vehicle by 48%However, upon closer examination, reality reveals greater complexity.
In June, Chinese manufacturers reached a historic record with more than 23,000 electric cars registered in European increase of 72% compared to the previous month.
This massive increase was not a direct result of an explosion in demand, but rather a calculated strategy by dealers, who carried out a series of self-registrations to avoid the tariffs that would come into effect in July.
Approximately 40% of the registered MG4s in that month correspond to self-registrations, indicating a concerted effort to protect profit margins before the regulatory change.
The tariff measure of the EUThe measure, which is still in its provisional phase until the final percentages applicable to each manufacturer are determined at the end of the year, seeks to protect the European automotive industry from competition from Chinese manufacturers, supported by significant state aid.
In 2021, for example, SAIC Motorthe largest Chinese manufacturer and owner of MG, received $598 million in subsidies from the Chinese governmentaimed at the development of electric and plug-in hybrid vehicles. This massive funding puts European manufacturers at a significant competitive disadvantage.
Despite the drop in Chinese electric car sales in July, it is crucial to consider the overall market context.
The 16 countries analyzed by Dataforceincluding powers such as Germany and Sweden, also experienced a decline in 36% in sales of electric vehicles, partly influenced by the reduction of government aid for the purchase of these vehicles.
This broader picture suggests that the decline in registrations is not exclusive to Chinese manufacturers, but a more general trend in the European market.
In parallel, Chinese brands have not remained passive in the face of these challenges. Instead of relying exclusively on electric cars, they have begun to strengthen their presence in the internal combustion and hybrid vehicle segment, where tariffs are significantly lower, just a 10%.
MG, for example, has managed to get 66% of its European sales to come from petrol and hybrid cars, demonstrating astute adaptation to market conditions.
BYD, another Chinese giant, has also adjusted its strategy in Europe. Although they originally entered the European market with an exclusively electric offering, have introduced the BYD Seal U DM-ia plug-in hybrid SUV that has already started to gain traction on the continent.
In August, BYD landed 1,000 units of this model in Spainaimed at meeting the growing demand for hybrid vehicles in the region.
This expansion of BYD’s portfolio reflects a deep understanding of the dynamics of the European market, where consumers still show a strong preference for vehicles that combine energy efficiency with the flexibility of traditional engines.
Despite European fears of a flood of Chinese electric cars flooding the market, the current reality shows a more nuanced scenario.
Chinese electric vehicles represent barely 10% of total car sales in Europeindicating that while they are an emerging force, they do not yet dominate the market.
However, Chinese manufacturers’ adaptability and rapid response to changes in trade policies suggest that they will soon find new ways to consolidate their presence in Europe.
The issue of European tariffs has temporarily slowed the advance of Chinese electric vehicles, but far from being a fatal blow, it has prompted Chinese manufacturers to diversify and strengthen their market strategies.
Competition in the European automotive sector is intensifying, and the immediate future promises a fierce battle on all fronts, from electric vehicles to hybrids and internal combustion engines.