Chinese manufacturers are starting to enter the European market, be it BYD, which has just launched its first models, but also Aiways, NIO or even MG, whose compact 4 beats the prices in its category. To these are added manufacturers dependent on Chinese groups: Volvo, Smart, Lotus, Polestar or vehicles produced in China by European manufacturers, be it Dacia Spring, the entire Polestar line or some Tesla Model Y.

In 2022, two-thirds of electric cars sold in Europe were from China!

It was all these vehicles imported to the Old Continent that were investigated by the German insurance company Allianz to objectively assess the economic threat they pose. And the conclusion is clear: it is 7 billion euros per year, which should no longer flow into the coffers of European manufacturers until 2030!

Some countries suffered more than others

The study also estimates economic output losses at EU level of €24 billion by 2030. Or the same 0.15% of its GDP. But some countries that are highly dependent on the auto industry, and especially auto manufacturing, may be more affected. In the Czech Republic or Slovakia, up to 0.4% of GDP is at risk. According to the report, four out of five cars sold in Europe are also produced there. “Europe is also the world’s leading export force in the sector, with trade in automotive products generating between €70 billion and €110 billion of active trade balance for the European economy every year over the past decade.”.

Last January on the CES in Las Vegas Carlos Tavares warned of a “terrible battle” that awaited European manufacturers against these Chinese newcomers. China does indeed control a significant portion of the resources needed to produce electric vehicles. And since all enterprises directly or indirectly depend on the state – the communist system obliges – it is much easier for them to control prices and the production chain. That, combined with much lower labor costs, allows them to produce more cheaply and efficiently.

When will there be European protectionism?

According to the results of this study, Allianz calls on European authorities to accept “China’s challenge to the European automotive industry” (which gives it its name), particularly by application increasing customs duties on vehicles imported from China, as well as by promoting the development of technologies and materials necessary for the production of electric vehicles in Europe. Or by allowing Chinese brands to produce in Europe. It is also offered by several European countries, including France and Germany. Especially making subsidies for the purchase of electric cars conditional on their production in Europe. A condition similar to that which causes US under the Inflation Reduction Act, which makes it difficult for Chinese manufacturers and vehicles to enter this market.