Chinese Automakers Adapt to EU Tariffs, Doubles European Market Share

Strategic Insights -

Chinese carmakers like BYD, Geely, Chery, and SAIC have successfully navigated the European Union's higher tariffs on electric vehicles from China by pivoting to hybrids or gasoline-powered cars, importing lower-cost models, and focusing on markets like Italy and Spain. As a result, Chinese brands have doubled their share of the European car market in April from a year earlier, accounting for 53,000 vehicles, or 4.9 percent of new-car registrations. Despite initial dips, sales of electric vehicles by Chinese automakers rebounded in April, with BYD outselling Tesla in Europe, albeit narrowly.

Key Takeaways:

  • Chinese carmakers have adapted to EU tariffs by shifting to hybrids, gasoline-powered cars, and importing lower-cost models.
  • In April, Chinese brands accounted for 4.9 percent of the E.U. new-car market, up from 2.4 percent a year earlier.
  • BYD outsold Tesla in Europe in April, with 7,231 electric car registrations compared to 7,165 from Tesla.
  • Chinese carmakers have maintained a significant share of the electric vehicle market in Europe, with about one in five electric vehicles sold in Q1 2023 being made in China.
  • The tariffs have encouraged Chinese carmakers to sell more gasoline-powered cars, undermining EU efforts to reduce greenhouse gas emissions.
  • BYD, Geely, Chery, and SAIC are among the Chinese companies leading the charge in the European market, with plans to expand production in Hungary and Turkey.
  • Chinese carmakers are gaining share faster than other foreign brands like Hyundai, Toyota, and Ford, which have been selling cars in Europe for decades.
  • In April, Hyundai and Toyota each accounted for about 8 percent of new car registrations in the European Union.

Statistics:

  • Chinese car brands accounted for 4.9% of the E.U. new-car market in April, up from 2.4% a year earlier.
  • Chinese carmakers sold 53,000 vehicles in April, a doubling from the same period last year.
  • Electric vehicle sales by BYD and other Chinese automakers rebounded 59% in April, compared to a 26% increase in electric vehicle sales by other manufacturers.
  • About one in five electric vehicles sold in Europe during Q1 2023 was made in China.
  • Chinese carmakers sold hybrids, gasoline-powered cars, and electric vehicles with an 8% tariff for Cars made by Tesla in Shanghai, 35% for SAIC, and 17% for BYD.

Sources:

  • JATO Dynamics
  • Schmidt Automotive Research
  • European Automobile Manufacturers' Association
  • The New York Times (article)
  • PHOTO: A Sportequipe dealer in Rome. Sportequipes are made in China then customized in Italy for the local market. (PHOTOGRAPH BY STEPHANIE GENGOTTI FOR THE NEW YORK TIMES)