Europe is at a turning point in its history. A bastion of European industry in decline, today more than ever the car is under threat from a massive influx of Chinese manufacturers, welcomed with open arms by the Europeans’ desire for accelerated electrification, which is undoubtedly in their hands. Several voices have now been raised for European protectionismor due to a higher import tax, or due to the provision of assistance for the purchase of an electric car due to the fact that it is produced in Europe.

At the same time, the health care crisis, as well as Beijing’s ambiguous position on the war in Ukraine and renewed tensions in relations with the United States and the West over Taiwan, highlight the dangers of the dominant position of suppliers.

Reduce addiction

European manufacturers are trying to reduce their dependence on China by piloting projects to build cells for electric vehicle batteries in Europe, as well as by developing new technologies use fewer raw materials controlled by China, including rare earths, graphite, or lithium or cobalt refining. So many materials, where the Chinese hold more than 50% of the world’s capacity.

However, there are other suppliers around the world, including Australia, the world’s largest producer of lithium.

Impossible

Nonetheless, severing ties with China is simply unthinkable. And not only for the car. The CEO of Mercedes, Ola Kellenius, recalled this in an interview with a German newspaper Bild am Sonntag: ” The main players in the world economy, Europe, the United States and China, are so intertwined that separation from China does not make sense.”.

In an interview with a German daily, Ola Kellenius, CEO of Mercedes, said that China’s divestment would put a large part of the German economy at risk, underscoring the very close ties most manufacturers have to the environmental empire.

Remember, however, that Mercedes counts Beijing Automotive Group and Geely chairman Li Shufu as its two largest shareholders.

In addition, The Chinese car market is particularly important for Mercedes, as well as other German luxury car manufacturers. In 2022, Mercedes received 18% of its revenues from it and reached 37% of its sales. Figures that should also continue to grow, according to Mr. Callenius: “Our sales figures in China are growing and I am very optimistic about our growth this year. During the years of the Crown, the richest Chinese especially saved” he said, believe that these savings should quickly benefit the group he leads.