Chinese electric car surge threatens German auto giants

Chinese electric car manufacturers are performing increasingly well in the global market, according to an analysis by Alix Partners cited by "Business Insider Poland." German companies like Volkswagen, BMW, and Mercedes are expected to be the main losers in this scenario.

According to the report, Chinese enterprises are expected to achieve control over one-third of the global automotive market by 2030, as reported by "Business Insider Poland."

The analysis conducted by Alix Partners indicates that Chinese automotive companies will also succeed more in the European market. Even higher tariffs imposed by the European Union on Chinese vehicles will not change this trend in the long term.

German companies like VW, BMW, and Mercedes, as well as firms from Japan and South Korea, are among those losing out to China's growing automotive power.

The report shows that European manufacturers struggle to compete with Chinese companies because they produce cheaper cars. European manufacturers' margins average around 15%, while their Chinese competitors achieve margins of only 7.1%.

Additionally, as noted in the report, the development cycles for cars in China are significantly shorter than those of global competitors, which also favors the expansion of Chinese enterprises.

In mid-June 2024, the European Commission decided to impose provisional tariffs on Chinese electric vehicles because of "unfair subsidization" of Chinese firms in this sector by Beijing. According to the EC, these subsidies pose a threat to EU manufacturers.

The EC has informed that it approached the People's Republic of China authorities to reach an agreement on this issue. If talks with Beijing do not result in an agreement, the provisional tariffs will be implemented from July 4.

The European Union is the largest recipient of Chinese electric vehicles, accounting for nearly 40 percent of this export.