Chinese electric vehicle (EV) makers are looking to take control of the European market, securing deals with some of the biggest car manufacturers.
That’s according to a report by Fitch Solutions Country Risk & Industry Research, which claims China could have a 15% stake in the European EV market by 2025 – up from just 5% currently.
Chinese businesses are looking to secure deals with Volkswagen and Stellantis for affordable parts – which have been a sticking point this year in the market.
The report alleges that European firms are struggling to compete with the mid-range EVs being offered by Chinese companies – with the price range of €30,000 (£27,800) upwards at risk.
Whether Europeans will be open to buying cars made by firms such as BYD, Xpeng or Aiways is the key sticking point, the report stresses – but points to the success of Korean carmakers Hyundai and Kia of breaching the continent in the past.
This year already, Chinese cars have made up 5% of the market share in Europe, the analysis reveals.
It states: “There are various nations, particularly in Western Europe, which are attractive markets for Chinese EV brands due to their large scale, high incomes and well-developed EV charging network infrastructures.
“Many European carmakers are currently targeting the premium high-margin EV segment, leaving a gap in the EV mass market that could be filled with low-cost Chinese-manufactured EVs.”
Europe charges a 10% tariff on Chinese car imports, whilst the US imposes a 25% tariff – which is why the report sees China tackling Europe before the US – alongside geopolitical tensions.
Fitch Solutions concluded: “We note that for Chinese-made EV cars to be successful in their expansion to new European markets, some barriers will need to be overcome in relation to the relative lack of brand recognition away from their home market – and the loyalty that many European consumers have towards long-established European brands such as Volkswagen, Mercedes-Benz and BMW.”