[BEIJING] Chinese automakers missed out on a European rebound in electric vehicle (EV) demand last month, as more-established manufacturers such as Volkswagen captured the biggest part of a jump in sales.
Just 6.9 per cent of EVs registered in the region in February were made by Chinese companies, based on data from automotive researcher Dataforce. That’s well below January’s 7.8 per cent and the lowest since February 2023.
Carmakers led by BYD and SAIC Motor Corp’s MG have been working to build the region into an export stronghold, but hit a wall when the European Union (EU) imposed tariffs on Chinese-made EVs last year. The trade barrier has caused a levelling-off of Chinese market share after years of rapid growth.
While individual brands including BYD and Xpeng grew strongly in Europe last month, the Chinese industry’s overall result in the region represents a step backwards. The EV market jumped 26 per cent in February, according to data this week from the European Automobile Manufacturers’ Association.
The EU duties are part of a global upswing in protectionism. US President Donald Trump this week moved to slap a 25 per cent tariff on imported cars and key parts, threatening Canada and the EU with further measures. The US had already imposed steep tariffs on Chinese EVs.
China, for its part, hit EU brandy with an anti-dumping tax and launched probes into dairy and pork products. It has also imposed added tariffs on some US agricultural imports.
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European demand
In Europe, electric-car demand has been stimulated this year by manufacturer incentives aimed at meeting regulatory EV sales targets, as well as the introduction of new models, particularly VW’s ID.7, Renault SA’s R5 and Kia’s EV3, said Julian Litzinger, an analyst with Dataforce.
Chinese carmakers, he said, have been held back by the new duties, which can reach as high as 45 per cent including existing import fees.
Consumer backlash against Tesla represented another lost opportunity for Chinese brands. Tesla’s European sales have plummeted in response to chief executive officer Elon Musk’s unwelcome intrusion into German politics.
That provided an opening for others to take up some sales left up for grabs, but for the most part, Chinese manufacturers failed to capitalise.
“The conventional brands have soaked up the volume from Tesla,” Litzinger said. “We see a clear effect from the tariffs” on Chinese automakers.
BYD has been less affected than MG, the former British sports-car maker whose state-owned parent SAIC was hit by the EU’s highest tariffs at 45.3 per cent in total. BYD’s EU tariff is 27 per cent, including the standard 10 per cent import levy. Non-Chinese companies including Tesla and BMW AG that import cars made in China are also subject to the added duties.
Over the past year, China’s largest producer of electric cars has cemented its position atop the pack in Europe, while MG has borne the biggest part of the setback.
BYD EV registrations across Europe, the UK and EFTA countries nearly doubled to 4,436 cars in February from a year earlier, based on data from Jato Dynamics, which tracks vehicle sales.
One key reason for BYD’s success has been its wide lineup covering the mainstream and premium segments, said Felipe Munoz, senior analyst at Jato.
“This explains why it has been able to increase its volumes in both the wealthier northern Europe and less-wealthy south,” Munoz said.
BYD is rolling out the affordable and popular Atto 2 compact sport utility vehicle across Europe, giving the region another fresh model.
In aggregate, Chinese brands outsold Tesla in European markets including Germany and Italy in February, Munoz said. That may be partly due to the US carmaker’s ageing lineup.
“We should wait some months until the updated Model Y is fully available across the region to better understand the situation,” he said. BLOOMBERG
