China-made EVs registered in Europe jumps almost a quarter this year

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Registrations of Chinese-made electric vehicles in Europe jumped 23 per cent between January and April compared to a year before, despite the looming threat of higher tariffs on battery-run car imports from the country.

A total 119,300 Chinese-made EVs were registered in western Europe including the UK in the first four months of 2024, accounting for one in five electric vehicles imported into the region, according to Schmidt Automotive Research, which analyses battery-run car sales in Europe.

“[Carmakers] keep churning out vehicles from China as it gives the best opportunity to make a profit on an electrical vehicle at the moment,” said Matthias Schmidt, founder of the data analysis firm.

The EU has become the market of choice for Chinese exporters, in part because it levies a 10 per cent tariff on EV imports from China. The US last month imposed a 100 per cent tariff on the vehicles.

Brussels is set to finalise a probe into whether Beijing’s subsidies have helped EVs made in China undercut European vehicles in a move that is expected to lead to higher tariffs, with the deadline for announcing any action set for July 4.

“Everyone is waiting for [the tariff decision] and for the [expected Chinese] retaliation,” said Björn Conrad, the chief executive of Sinolytics, a China-focused consultancy.

Western and Japanese brands manufactured in China including Tesla, Volkswagen and Honda accounted for 54 per cent of the total of registered Chinese-made EVs in the first four months with Chinese brands such as MG and BYD making up the remainder.

Manufacturing cars in China is cheaper, something that has led western brands including Tesla and Renault to make electric cars in the market and then import them to Europe.

For example, analysts at UBS last year estimated BYD had a cost advantage of some 25 per cent over legacy carmakers.

As well as concerns over retaliation among western carmakers reliant on the Chinese market, the importance of the country as a manufacturing centre and a lucrative source of profits has led car executives to warn against rising tariffs on EV imports globally.

Global carmaker bosses from Elon Musk’s Tesla to Mercedes and VW have in recent months spoken out against tariffs on Chinese-made cars in the US and Europe, fearing a damaging retaliation from China.

Some carmakers are hedging their bets. In a move that would help avoid higher tariffs, China’s BYD last month said it has started studying sites for a second European plant. Volvo has said it will also produce its EX30 EV model in its Ghent plant as well as in China from next year.

The prospect of higher tariffs also means importing is unlikely to be a long-term option for manufacturers that want to gain significant market share.

Schmidt said “2024 is a gap in the door for the Chinese to penetrate the European market but that door is set to be shut”.

Despite fears among European car executives about a Chinese EV onslaught, many analysts expect growth in imports from the country to slow going forward.

Michael Tyndall, an autos analyst at HSBC, said limited European consumer awareness of Chinese brands was likely to slow their market share gains. “What Europeans buy and what the Chinese make don’t necessarily overlap,” he said.