German Media: Chinese Electric Vehicles Will Eventually Enter the European Market

The Neue Zürcher Zeitung comments that while tariff barriers may temporarily delay the competitive pressure caused by Chinese electric vehicles, the eventual entry of Chinese brands into the European market is an inevitable trend.

The Neue Zürcher Zeitung notes that the era when Europe and the United States dominated the global automotive market has long passed. As with many other industrial sectors, China has become the world’s largest automobile producer and exporter. In an article titled "Chinese Electric Vehicles Will Eventually Enter the European Market," it states:

"Faced with China’s formidable market power, both the EU and the U.S. have erected tariff barriers aimed at protecting their domestic auto industries. Two years ago, Europe and the U.S. began imposing punitive tariffs on Chinese electric vehicles. These tariffs were specifically targeted at EVs, as Chinese manufacturers’ strength has proven overwhelming for Western automakers. Under President Biden, the U.S. decided to impose a 100% punitive tariff on Chinese electric vehicles, effectively blocking Chinese brands from selling in America and leaving Tesla’s EVs, as well as General Motors’ and Ford’s large gasoline SUVs and pickup trucks, largely free from foreign competition. In the EU, Chinese EVs face relatively lower tariffs—10% basic tariff plus an additional tariff of up to 35%."

Despite these extra tariffs, Chinese electric vehicles have still managed to increase their market share in Europe to nearly 10%. Due to extremely low production costs, even after tariffs are applied, Chinese vehicles remain highly competitive. Moreover, the rapid rise of Chinese EVs in Europe can also be attributed to a bizarre regulation by Brussels bureaucrats: hybrid vehicles powered by both gasoline and electricity are exempt from additional tariffs. These types of vehicles are becoming increasingly popular in Europe, as drivers no longer need to worry about being stranded due to depleted batteries.

Given this situation, multiple Chinese manufacturers have already begun establishing themselves in the European market, with promising prospects. Their success clearly demonstrates that the trend of Chinese cars entering the European market is now unstoppable. While punitive tariffs may give European carmakers like Volkswagen, Renault, and Mercedes-Benz some time to respond to Chinese competition, a wiser approach would be to let consumers make their own choices instead of forcing them to buy domestic products through tariff barriers. If consumers believe that BYD or MG vehicles offer better value for money, then we should accept this reality."

The Neue Zürcher Zeitung concludes that tariffs can at best only temporarily slow down the influx of Chinese automotive brands, and it is merely a matter of time before Chinese automakers begin producing locally in Europe.

"With declining birth rates and the rapid advancement of autonomous driving technology, future demand for automobiles is unlikely to return to past levels. The automotive industry urgently needs restructuring. However, protectionist measures such as tariffs implemented by Europe and the U.S. only serve to backfire and will likely lead to even greater hardship for the industry in the future."

Original source: toutiao.com/article/1869484439262217/

Disclaimer: The views expressed in this article are those of the author(s) alone.