European Countries To Cut Their Independence on Chinese EVs
- Written by : Ashton G. Curran
- Date Published : 2023-04-06
- Date Updated : 2023-04-06
- Category / Tag : articles
On Thursday, the President of the European Commission, Ursula von der Leyen, and the President of France, Emmanuel Macron, traveled to Beijing to meet with the Chinese President, Xi Jinping. The aim of the meeting was to address the issue of Europe's economic dependence on China, which is becoming an increasingly pressing concern for the EU....
One area of particular interest is the trade in cars between Europe and China.
In recent years, EU producers have managed to increase their exports of cars to China significantly.
According to projections, exports are set to reach €24.3 billion in 2022, which is 56% higher than in 2016.
The majority of these exports (around 80%) come from Germany.
However, the picture is very different when it comes to electric vehicle (EV) trade.
The EU is currently in a clear deficit, with Chinese EV exports to the EU jumping from less than €800 million in 2020 to €6.9 billion in 2022.
A recent study by PwC has predicted that nearly 800,000 cars made in China will be sold in Europe by 2025, which is almost double the number projected for 2022.
Of these, just under half will come from Western automakers with production facilities in China, such as BMW and Renault, while just over half will come from Chinese producers like MG and BYD.
This increase in the number of cars being imported from China is likely to exacerbate the EU's concerns about its economic dependence on the country.
While it is true that Europe is still exporting more cars to China than it is importing, the gap between the two is rapidly narrowing.
This could have serious implications for the EU's economic stability, particularly if China continues to increase its dominance in the automotive sector.
The EU has already taken steps to address this issue, with a number of measures being introduced to support the growth of the EV industry within Europe.
These include subsidies for EV purchases and investment in the development of charging infrastructure.
However, it is clear that more needs to be done if the EU is to compete with China in this rapidly evolving sector.
It remains to be seen what will come out of the meeting between the EU and Chinese leaders.
However, it is clear that the issue of economic dependence on China is likely to be high on the agenda.
The EU will need to find a way to balance its desire for trade with China with the need to protect its own economic interests and ensure its long-term stability.