Multiple Chinese electric vehicle (EV) manufacturers are actively pursuing plans to establish production facilities within the European Union. This move comes as these companies seek to expand their market presence and navigate newly imposed tariffs on Chinese-made EVs entering the EU market.
The surge in imports of Chinese-made EVs has sparked concerns among European automakers, who fear being priced out of their home market. In response, the European Union has implemented import tariffs on Chinese EVs, citing significant state subsidies received by these manufacturers. This regulatory action has created a strong incentive for Chinese carmakers to consider local production as a means to mitigate these tariffs and maintain competitive pricing.
Several prominent Chinese automakers have already made significant strides towards European production. Chery Auto, China’s largest automaker by export volume, has signed a joint venture with Spain’s EV Motors to open its first European manufacturing site in Barcelona. Production is set to commence this year, with both Chery and EV Motors manufacturing their own vehicles at the facility. Additionally, Chery is exploring opportunities in Italy and the United Kingdom for potential factory locations.
BYD, the world’s largest EV maker, has announced ambitious plans to localize production for all vehicles sold in Europe. The company intends to produce components within Europe and assemble battery packs at plants in Hungary and Turkey, importing only battery cells from China. This move demonstrates BYD’s commitment to deepening its European presence and aligning with local production preferences.
Leapmotor, in partnership with Stellantis, is poised to begin taking orders in Europe for its compact city car and SUV models. The T03 EV compact will be assembled at Stellantis’ Tychy plant in Poland, with hints that the C10 SUV could also see European production. This collaboration showcases how Chinese manufacturers are leveraging partnerships with established European automakers to gain a foothold in the market.
State-owned SAIC Motor, China’s second-largest auto exporter known for its MG-branded cars, is in the process of selecting a site for an EV factory in Europe. The company has already established a parts center in Amsterdam and plans to open a facility in France to meet growing demand.
Other Chinese automakers exploring European production options include XPeng, Geely, GAC, Great Wall Motor, and Dongfeng Motor Group. These companies are at various stages of planning and negotiation, with some considering multiple locations across different European countries.
The move towards European production by Chinese EV makers is not without challenges. Cultural differences, labor regulations, and the need to establish local supply chains present significant hurdles. Moreover, some European countries may have reservations about welcoming Chinese manufacturers, as evidenced by reported hesitations from Polish officials regarding Geely’s potential investment.
This trend towards localized production by Chinese EV manufacturers could have far-reaching implications for the European automotive industry. It may lead to increased competition, potentially driving down prices for European consumers while putting pressure on established European automakers to innovate and reduce costs. Additionally, it could create new job opportunities and stimulate local economies in the regions where these factories are established.
However, the influx of Chinese manufacturers also raises questions about the long-term competitiveness of European automakers in the EV market. As Chinese companies gain a stronger foothold through local production, they may be better positioned to capture market share and influence the direction of EV development in Europe.