In Europe, Chinese-made electric vehicles are becoming increasingly common, comprising 19.5% of the roughly 300,000 EVs sold in the European Union last year. According to a report from Transport and Environment, a leading clean transport advocacy group in Europe, this trend is expected to continue with Chinese EVs projected to capture 25% of the market share in the EU this year.
This includes models from well-known brands like Tesla and Dacia, as well as offerings from Chinese companies such as BYD. While Tesla was the largest importer of Chinese-made EVs in the EU last year (28%), Dacia followed closely behind at 20%. The influx of Chinese automakers into the EU market has surged from 0.4% in 2019 to 7.9% in the past year, as reported by T&E.
Rising tariffs could drive innovation in the EU
The surge in Chinese EV imports presents an opportunity for the EU to bolster its local economy and promote innovation. Transport & Environment advocates for increased import tariffs, encouraging Chinese companies to establish factories in Europe, creating job opportunities for local workers and fostering economic growth.
The forecast predicts that homegrown Chinese EV brands such as BYD, MG, NIO, and others could capture up to 20% of the EU EV market by 2027, marking a significant shift from 2019 statistics.
While Chinese-made EVs may offer a cost advantage over European counterparts, sustained reliance on imports poses a risk to Europe’s economy and innovation ecosystem. To address this challenge, T&E proposes increasing import tariffs to incentivize domestic production and investment in clean tech supply chains.
Furthermore, T&E suggests raising import tariffs on battery cells, currently set at a nominal rate in the EU, to rebalance trade dynamics with China and the United States. This strategic move aims to generate additional revenue for the EU budget and foster local manufacturing capabilities.
The proposed tariff adjustments could alter the competitive landscape in the EU, potentially making medium-sized Chinese EVs more expensive than local alternatives while maintaining cost advantages for compact SUVs and larger vehicles. The projected revenue increase from tariffs could be reinvested in scaling up local clean technology sectors.
Anticipating these shifts, Chinese companies like BYD and CATL are considering establishing EU-based production facilities to mitigate tariff impacts and create employment opportunities for Europeans. This proactive response aligns with T&E’s call for a regulatory framework that accelerates the adoption of EU-made EVs and strengthens the regional supply chain.