Can Europe compete with Chinese electric cars?

In recent years electric cars have become an increasingly important part of the European car market. In 2024 almost one in seven new cars in the European Union was fully electric. In some countries, such as Norway, electric cars have already almost completely displaced petrol and diesel cars among new registrations. In Germany, sales of electric cars fell sharply in 2024, after the state unexpectedly abolished the purchase bonus at the end of 2023.

At the same time, more and more Chinese brands are arriving on the European market. The best known among them is the brand BYD, which has already overtaken the American company Tesla in sales of electric cars. Chinese manufacturers have a big advantage, because they control almost all stages of battery production, from raw materials to finished cells. In addition, their costs for labour and energy are lower, and the Chinese state has been supporting the industry with subsidies for years.

In 2023 the European Commission launched an investigation, because it believed that China was subsidising its manufacturers unfairly. As a result, since the end of 2024 the EU has been imposing additional tariffs on electric cars from China. They amount to up to around 35 per cent, depending on the manufacturer, and apply on top of the usual tariff of ten per cent. German car makers were against the tariffs, because they feared Chinese countermeasures.

Under particularly great pressure is Volkswagen, the largest car maker in Europe. For many years the group earned a lot of money in China, but its market share there has fallen considerably. Chinese buyers increasingly choose domestic brands, which offer modern software at lower prices. In 2024, for the first time in its history Volkswagen spoke openly about possible factory closures in Germany. In the end, the company and the union reached a compromise, according to which more than 30,000 jobs are to be cut in Germany by 2030.

The batteries and the charging network are very important for the future of electric cars. Many drivers still hesitate to buy an electric car, because they fear a lack of charging points on long journeys. The number of public charging points in Europe is growing fast, but most of them are located in just three countries: the Netherlands, Germany and France.

Can European manufacturers hold on to their position? Many experts believe that this depends on how quickly they will produce cheaper models and better batteries. Meanwhile, some Chinese companies such as BYD are building factories in Hungary and Turkey, so that they could avoid the tariffs of the EU. It is clear that competition on the European market will become even tougher.