We are halfway into 2024, and Chinese EVs still attract worldwide attention. How’s the sector doing over the past several months? The annual report by IEA, Global EV Outlook 2024, sheds lots of light on the subject.
Chinese automakers now produce over half of the world’s electric vehicles, fueled by a decade of heavy investment ($230.8 billion), according to CSIS data. Experts predict Chinese brands will soon dominate the global market, as they gain scale and expertise.
Domestically, the EV market boomed in 2023 (8.1 million registrations, +35% YoY) despite subsidy removal. Exports soared (4 million cars, +65% YoY) with 1.2 million EVs sold to Europe and Asia-Pacific. While national subsidies ended in 2023, provincial support continues.
Looming challenges: trade tensions (EU/US tariffs) and profitability pressures (BYD profit per car at $739, Tesla at $2,919).
Some thoughts shared by observers and experts:
- Former European Automotive correspondent for Reuters, Neil Winton, noted that EU Decision On China EV Import Tariffs Poses Harsh Questions. The temporary tariffs announced earlier this month are not effective enough. He quoted Allianz Trade as suggesting ‘Chinese-built EVs could cost European automakers €7 billion ($7.7 billion) a year in lost profits by 2030 unless the EU acts to raise tariffs, boost battery and other technology, or persuade China to build cars in Europe’.
- FT reporter Ed White, speaking on a podcast, pointed at an advantage Chinese EV makers arguably still have even after EU’s new tariffs, the Chinese retaliation falling on French cognac and European pork, and the ‘very impressive supply chain for these crucial clean tech industries – not just EVs, but also things like solar and wind and many other industries’. The EU and the US are not the only two markets in the world, after all. The shift of focus, as White puts it, is increasingly obvious, that ‘all of the key emerging markets and all of the developing countries are really in play. ‘And we are already seeing China shift a lot of its export focus to those markets,’ he said.
- Tu Le, who publishes the weekly Sino Auto Insights (SAI) newsletter, shared his thoughts on the tariff-slapping tactics and the broader issues behind the headlines, online and offline (moderating panel discussions on this topic in London and Paris). His eyes are focused on EV makers adapting for survival, seeking new markets worldwide but finding the overcapacity issue hard to sidestep. The US and EU tariffs will slow down Chinese EVs’ speed of entry but may provide less protection for their car makers. He thinks ‘China EV Inc. to build locally in Europe’ sounds more realistic. Many Western automakers have already set up joint ventures with Chinese counterparts, after all.
But the overcapacity issue persists. Other dimensions include Chinese retaliations and the impacts of the shifting global EV market landscape on the supply chain, particularly the battery sector.
For a detailed, field-study style observation on the current status of Chinese EV makers and the market environment, the struggles and the battles, we found this article quite informative. It was originally published in Chinese and later translated into English by Baiguan, an English-language newsletter about China.
For folks outside China, a recent marketing campaign by BYD exemplifies its global vision and ambition – it invites you to ‘embrace the future with BYD’s groundbreaking 2024 Global Brand Film’, and promises a ‘journey where innovation meets sustainability’. BYD is making EVs in Hungary, a European country.
Further reading: