Chinese Electric Vehicle Manufacturers Gaining Ground in Europe

Chinese Electric Vehicle Manufacturers Gaining Ground in Europe

Chinese electric car makers are gaining ground in Europe, where a stagnant market could use their budget-friendly models.china ev But the shift is a reminder of how they got here—the government’s generous subsidies, tax breaks and procurement contracts have helped homegrown brands become global competitors.china ev

Back in 2009, China started handing out financial subsidies for manufacturers that produced EVs, such as buses and taxis.china ev It also required that a certain percentage of their cars be battery-powered to avoid penalties.china ev As those policies grew, the companies improved their models and marketed them more widely.

In 2022, Shenzhen-based BYD became the world’s biggest EV maker by sales, and other Chinese firms began expanding abroad.china ev That expansion has alarmed European governments and regulators, who have complained that their markets are flooded with cheaper Chinese cars.china ev And in September, the European Commission launched a probe of Chinese EV subsidies.

The rise of the EV industry has made some traditional automakers like Ford and GM rethink their own plans for new vehicles.china ev Some are cutting budgets to focus on SUVs that offer higher fuel efficiency and longer ranges than sedans—a popular class of vehicle in the US and some other countries.china ev The shift has made others consider building a separate division focused on EVs, where they might be better positioned to compete with China’s domestic manufacturers.

One reason China’s EV industry has grown is that the government supports domestic manufacturers with subsidies and procurement contracts, while limiting ownership of gasoline cars in many cities.china ev That has encouraged local drivers to switch to electric vehicles.china ev At the same time, the government has subsidized charging stations to encourage widespread adoption and help build a grid of power infrastructure that can support the cars.

China also has a leg up in developing new technologies because it is so huge—it accounts for about half of the world’s production capacity.china ev Its large manufacturers can afford to invest in R&D, and the country has a workforce with ample training opportunities.

The resulting products have been attractive to consumers, and the EV market has exploded worldwide.china ev But that growth has brought along challenges, including concerns about whether some companies are selling cars without the proper safety features and an influx of secondhand imports that may not comply with local laws.

At a site near a river and a deserted tram track in Hangzhou, about 1,000 EVs were parked and gathering dust.china ev Most were from the Chinese brands Changan, Zhejiang Geely Holding Co. and Dongfeng Motor Group Co., whose subsidiaries include Nissan’s joint venture in China. The EVs at this location had blue plates, which meant they were built and registered before the city switched to green ones for the new-energy vehicles. Some had stickers from Ledao Chuxing, a ride-hailing company that shut down in 2020 and was acquired by Geely a year later. Traders said they shipped some of these used EVs to Russia and Kazakhstan, where they are a trendy status symbol.