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A clear forecast emerges from this year’s MotoBarometer 2024 survey: Chinese electric cars are on course to become the European market leaders in the coming decade.

As many as 53% of respondents from the Polish automotive industry believe that Chinese manufacturers will be the top sellers of electric cars in Europe by 2035. Similar predictions are made by respondents in Germany (45%), Spain (54%) and Hungary (59%).

European car and parts manufacturers are aware of the ‘Chinese drive to win’ and overwhelmingly support further tariff increases introduced by the European Commission. In Poland, 66% of respondents feel this way and 73% want further steps to stem the flow of Chinese EVs into Europe. Experts at Exact x Forestall (formerly Exact Systems) point out that the long-term effects of such measures could be counterproductive. Chinese factories will be set up in Europe, relations between Beijing and Brussels will deteriorate and European manufacturers will sell fewer and fewer of their models in the Middle Kingdom.

According to JATO Dynamics data, the leader in European Union electric car sales in the first half of 2024 was the Volkswagen Group (178,000 new EV registrations, -14 per cent year-on-year). In second place was the BMW Group with a 10 per cent share of the European EV market. However, Chinese brands are doing increasingly well in Europe, with a 7.4 per cent share of total EV sales in the first half of 2024 (6 per cent year-on-year). In total, Europeans bought 70,000 Chinese EVs, an increase of 26 percent compared to last year.

On the road to market leadership

The latest Exact x Forestall report ‘MotoBarometer 2024: Automotive mood in Europe‘, shows that it is only a matter of time before manufacturers from the Middle Kingdom take the title of leader in the European electric car market.

In no fewer than nine of the 11 countries surveyed, the largest number of respondents said that in 2035 (the year when internal combustion cars are phased out), the leader in EV sales in the European Union will be a Chinese manufacturer. This includes Poland (53% of respondents for a Chinese brand̨), Germany (45%), Turkey (48%) or Hungary (59%). Only in France (51%) and Romania (48%) do most respondents favour a European manufacturer.

In Poland, one in three respondents (32%) bet on a European brand and only 4% on an American brand.

“Electromobility, which was supposed to ‘kick-start’ the European automotive sector, is not only failing to attract new drivers, but its share of total new car sales is falling year on year. According to ACEA, the share of pure electric cars in total new car registrations in the European Union fell to 12.5% in the first half of this year, down from 12.9% last year. In Poland, the trend is similar, but the result itself is significantly worse – electric cars account for only 3.2% of all new passenger cars. We are losing this battle because of poor charging infrastructure, high prices for electric vehicles or the end of government subsidy programmes. But soon the European car industry could lose even more if it does not effectively stop the Chinese from winning”, says Jacek Opala, CEO of Exact x Forestall, formerly Exact Systems. He adds: ‘Although we still have more than ten years to develop European electromobility, the industry has already made up its mind. They do not believe in the success of European or domestic brands – they strongly point to Chinese manufacturers as the future leaders of the EV market. This should not only make the European automotive sector reflect, but also develop concrete strategies to compete effectively. The time to act is now, otherwise Europe will be left behind.

Stopping China’s drive to victory

Recognising the threat posed by the dynamic growth of Chinese manufacturers, the European Union has introduced temporary tariffs on Chinese electric cars in 2024 (the European Commission may soon make them permanent). MotoBarometer 2024 shows that the vast majority of the European automotive industry supports the bond policy. In 9 out of 11 countries, a majority of respondents believe that the European Commission’s introduction of further tariff increases on electric cars imported from China is a good thing. These include Poland, where 66% of respondents strongly or somewhat support such support for the European automotive industry, Germany (66% in favour), Turkey (54% in favour) and France (73% in favour). Only in Slovakia and Hungary are less than half of respondents in favour (48% and 46% respectively).

In addition, representatives of the European automotive industry mostly want further steps to be taken to prevent the import of Chinese electric cars into Europe. In Poland, almost 73% of respondents think so. This group also includes Germany (59%), the Czech Republic (59%), Spain (71%) and Turkey (63%). Similarly, in Slovakia, less than half of respondents agree and the majority – 51% – strongly or somewhat disagree with a further tightening of tariff policy towards China.

Katarzyna Sobótka of Claritas Investments believes that Europe missed the start of the electric car revolution and is now pulling out the tariff gun. Chinese companies are entering Europe very cleverly – through well-known and well-established dealer networks that also offer service. They are also planning to build factories in the EU to circumvent the tariffs and increase their market share in Europe. All this makes them a huge threat to the traditional European car industry. The tariffs could be a good solution if lessons are learnt quickly and Europe adopts a coherent approach to the electrification of transport, offering electric cars that are accessible to everyone and of good quality,’ says Katarzyna Sobótka, Director of Electromobility, Claritas Investments.

More Chinese factories in Europe, fewer sales in China

The entry of Chinese brands into the European market not only puts pressure on European companies, but also shows how quickly the rules of the automotive game can change. Unfortunately, in addition to the positive effects expected by the industry, the tariffs could also have negative consequences.

The most serious of these, according to almost half of Polish industry representatives (46%), could be the relocation of factories from Chinese manufacturers to Europe. 39% fear a worsening of relations between Beijing and Brussels, and 37% point to even higher prices for cars from European manufacturers due to higher prices for parts from Chinese suppliers. Interestingly, almost one in three Polish respondents fear that tariffs will ultimately slow down rather than accelerate the development of European electric mobility.

“New factories from Chinese manufacturers in European countries can have a bittersweet taste. On the one hand, countries such as Poland, the Czech Republic or Slovakia are keen to attract this type of investment, as it means new jobs, an influx of know-how and an increase in the country’s importance in the automotive supply chain. On the other hand, it is the best way for Chinese manufacturers to evade tariffs, offer much cheaper cars than European models and gain an ever greater share of the European market. After all, price is the first criterion for a Polish or European driver when choosing an electric car, and Europe is increasingly losing out in this respect”, says Jacek Opala of Exact x Forestall.

The Exact x Forestall expert points out that the negative impact of tariffs on European manufacturers will be felt not only in Europe, but also in China.

“Deteriorating European-Chinese relations could affect the choices of Chinese citizens, who will be less likely to opt for European models and more likely to opt for domestic models. European manufacturers of car components and parts could also lose out. There is a lot of competition in China at the moment, and it is no longer just China’s retaliatory measures that could have a negative impact on European sales in the Middle Kingdom. Increasing competition within China is also encouraging Chinese companies to enter Europe”, adds Jacek Opala.