A quarter of the electric cars sold in Europe in 2024 will come from China.

This development represents a significant increase compared to the previous year, when the share of Chinese electric cars in Europe already stood at nearly 19.5 percent, and 15 percent in Germany. In light of this development, the European Union is considering the introduction of import duties to counter the subsidies for the electric car industry in China and to increasingly shift production to Europe.

T&E emphasizes that only by increasing the production of electric cars for the mass market and by investing in the European battery supply chain can a competitive alternative to Chinese brands be created.

While the Chinese imports have so far mostly consisted of Tesla, Dacia, and BMW vehicles produced there, it is expected that Chinese car brands could achieve a market share of 11 percent in Europe by 2024, which could rise to 20 percent by 2027. Particularly, BYD aims to achieve a 5 percent market share in the European electric car market by 2025.

Sebastian Bock, the managing director of T&E Germany, emphasizes the importance of tariffs to promote manufacturing in Europe and to create fair competitive conditions. However, he warns that tariffs cannot serve as a long-term protective measure for European manufacturers, as Chinese companies might start establishing production sites in Europe. A 25 percent increase in EU tariffs on all vehicle imports from China could make certain vehicle classes more expensive than their European counterparts, thus providing a strong argument for local production.

Nevertheless, T&E makes it clear that the EU's goal shouldn't be to shield its auto industry from fair competition, as this would limit the availability of affordable electric cars for European consumers. Instead, it is crucial that higher tariffs go hand in hand with regulatory measures to promote electric car production, including the electrification of company car fleets by 2030.

The challenge in battery production remains, as cells manufactured in China are at least 20 percent cheaper than those in Europe, and Chinese manufacturers lead both in technology and the supply chain. T&E proposes industrial measures such as subsidies for clean and circular production as well as "Made in EU" targets to boost local cell production. Sebastian Bock compares the importance of batteries to that of solar cells and stresses the urgency of investing in a sustainable and secure battery supply chain in Europe.