The European Automobile Manufacturers’ Association (ACEA) has recently published a fact sheet that examines the vehicle trade flows between the EU and China, including the battery-electric car market. The fact sheet reveals some interesting trends and challenges for the European automotive industry in relation to its largest trading partner.
EU vehicle exports to China: a declining trend
According to the fact sheet, China is the third largest market for EU vehicle exports after the UK (ranked first) and the US (ranked second). However, the EU vehicle exports to China have been decreasing in recent years, from 1.2 million units in 2018 to 0.9 million units in 2022. This represents a drop of 25% in four years.
The fact sheet attributes this decline to several factors, such as:
- The slowdown of the Chinese economy and the impact of the COVID-19 pandemic on consumer demand.
- The increasing competition from Chinese domestic brands, which have gained market share in China and abroad.
- The regulatory barriers and tariffs imposed by China on foreign vehicles, especially those with internal combustion engines (ICEs).
- The lack of reciprocity and level playing field between the EU and China in terms of market access, investment rules, subsidies, and intellectual property rights.
EU vehicle imports from China: a rising trend
On the other hand, the fact sheet shows that the EU vehicle imports from China have been increasing in recent years, from 0.3 million units in 2018 to 0.5 million units in 2022. This represents a growth of 67% in four years.
The fact sheet explains that this growth is mainly driven by the surge of battery-electric vehicles (BEVs) from China, which accounted for around 63% of the EU vehicle imports from China in 2022. The fact sheet also notes that Chinese brands have increased their market share in the EU BEV market from 0.4% in 2019 to almost 4% in 2022.
The fact sheet suggests that this trend reflects several factors, such as:
- The strong demand for BEVs in the EU, stimulated by the ambitious CO2 emission targets and incentives for low-emission vehicles.
- The competitive advantage of Chinese manufacturers in terms of battery technology, production capacity, and cost efficiency.
- The strategic partnerships and investments between Chinese and European companies in the field of electric mobility.
- The openness and attractiveness of the EU market for foreign vehicles, which offers lower tariffs and fewer regulatory barriers than China.
EU-China vehicle trade: a call for action
The fact sheet concludes that the EU-China vehicle trade is facing significant challenges and imbalances, which pose a threat to the competitiveness and sustainability of the European automotive industry. The fact sheet calls for a more balanced and fair trade relationship between the EU and China, based on the following principles:
- The respect for international trade rules and commitments, including the elimination of unjustified tariffs, quotas, and non-tariff barriers.
- The protection of intellectual property rights and prevention of forced technology transfers.
- The promotion of reciprocal market access and investment opportunities, especially for ICE vehicles and new energy vehicles.
- The enhancement of cooperation and dialogue on regulatory convergence and harmonization, especially on environmental, safety, and digital standards.
The fact sheet also urges the EU to support its automotive industry by fostering innovation, skills development, infrastructure deployment, and consumer awareness in the field of electric mobility.
