EU to import 800K Chinese cars by 2025

EUROPE could import up to 800,000 Chinese-made cars by 2025, many of them battery electric vehicles (BEV), say a report published by the German branch of analytical agency PwC.

Such a development would turn Europe into a net importer of cars, PwC said, with an estimated 2025 import surplus of more than 221,000 vehicles.

In 2015, Europe exported approximately 1.7 million vehicles.

PwC says the shift will come as Chinese brands increase their market share and, at the same time, European brands build more BEVs in China.

Of the potential 800,000 Chinese cars to be imported into Europe by 2025, approximately 330,000 would be from Western manufacturers such as BMW, Renault Group and Tesla – all of which currently export BEVs to Europe from China.

“Global battery electric vehicle sales reached the two million mark for the first time in the third quarter of 2022, growing by 75 per cent compared to the corresponding period last year,” said PwC partner and automotive specialist Felix Kuhnert.

“Much of that increase can be attributed to China, where the BEV market continued to expand at breakneck speed. More than 1.5 million BEVs were sold there in Q3 2022, representing a 94 per cent increases against Q3 2021.”

Automotive News Europe (ANE) suggests that with OEMs and consumers now increasingly focused on BEVs, the plug-in hybrid (PHEV) market has begun to decline.

The publication says that while BEV sales expanded in all analysed European markets in Q3 of 2022 (against the same period last year) except for Italy and Norway, PHEV sales declined in all European markets, as well as in international markets including the United States and South Korea.

Bucking the trend – and showing its dominance in the global BEV market – China showed what ANE and PwC referred to as “remarkable growth”.

“Constant rapid growth in such a huge market has inevitably cemented China’s BEV standing on the global stage,” Mr Kuhnert continued.

“In the year 2020, just over one half of the total number of BEVs sold in all analysed markets were sold in China. In Q3 2022, that figure had risen to 73 per cent.

“Flushed with this success and furnished with all the BEV expertise they have developed at home; Chinese OEMs are now seeking to consolidate their foothold in Europe. Compared to their previous market entries in the past decade, the playing field has now been significantly levelled.”

Mr Kuhnert said that while European manufacturers continued to face supply chain issues and were focused on building more expensive, lower-volume EVs in Europe, Chinese manufacturers had “optimised their products in the domestic market, so that they are now bringing affordable BEV models, innovative technology and novel concepts to Europe”.

He forecasts that Chinese brands will have an EV market share of between 3.8 and 7.9 per cent in Europe by the middle of this decade.

“Much of that depends on how the brands are perceived. Chinese brands are still relatively unknown in Europe and have much work to do to build a strong BEV reputation, particularly when it comes to premium models,” Mr Kuhnert explained.

The same could be said for the Australian market, where an increasing number of Chinese-made cars are available, and more are expected over the coming years.

Importers of such models will need to work hard to ensure the expectations of Australian buyers are met.

Year-to-date figures published by the FCAI shows 93,697 Chinese-sourced vehicles have been delivered to customers in Australia this year, an increase of 51.2 per cent over the same time last year.

China now ranks as the fourth most-popular source of new vehicles sold in Australia, ahead of Japan, Thailand and South Korea.

Australian new vehicles country of origin*:

*Figures sourced courtesy of the FCAI dated as of 4 November 2022.