In 2021, Europe announced a target to go all-electric by 2035. It was part of a greater package of climate reforms designed to target a 55% reduction in CO2 emissions by 2030 and full climate neutrality by 2050.
European automakers asked the EU Commission to review and potentially modify the bloc’s 2035 all-EV target at an auto summit on Friday, but the commission is reportedly standing firm despite the industry’s big push this week for more leniency.
Time for more political contributions from EU automakers?
Why are EU automakers making the ask?
European EV sales and market share have continued to rise, but even more importantly, Chinese EV sales have accelerated rapidly… much faster than those in Europe. In 2020, Europe had 11% plug-in (BEV + PHEV) market share and China was at 5%; but in the interim, China leapfrogged Europe by hitting 47% plug-in share in 2024, while Europe only reached 24%. BEV-only numbers are lower, but BEVs still outsell PHEVs significantly.
That would be very difficult because of the way the EU is structured. Only 3 or 4 out of the 27 EU countries have a meaningful auto industry. And if those 3 or 4 demand that all 27 buy overpriced, old-tech, cars from them instead of less expensive, new-tech, cars from China, then they will almost surely vote against it! (I think things like tariffs can be defeated by 15 member states voting against).
Any idea what percentage of the Chineses auto components are imported? The costs of batteries, radios, etc are certainly cheaper when bought in larger quantities.
Not a clue, but I would guess a high percentage - but that appears to be changing (from a few days ago):
Stella Li also confirmed that BYD is in discussions “with dozens of local component manufacturers” to establish a complete supply chain in Europe to support the company’s regional growth. She told reporters: “We are investing not only in vehicle plants but also in the supply chain. Our goal is to build a local ecosystem for European production.”
Me neither.
BYD will use EU materials to build EVs in Hungary.
BYD has an agreement with a Vienna steel maker.
/Voestalpine will supply “flat steel for car bodies and outer skin components” starting in the “autumn.”
That steel will stamped into shape in Hungary.
Xpeng on the other hand will have an assembly plant. Assembling Chinese parts into an EV.
The initial report out of Austria in March stated that both XPeng and GAC were planning to utilize a Semi-Knocked-Down (SKD) build process, in which pre-fabricated components are imported from China into Austria before being assembled locally at Magna Steyr.
EU tariffs are different from US tariffs.
First, they are lower than US tariffs.
Second, they are on whole Chinese made EVs not on Chinese made parts. Though that could change in the future. And the tariff varies per automaker.
The duties differ depending on the maker: 17% for BYD, 18.8% for Geely and 35.3% for state-owned SAIC. Other EV manufacturers in China, including Volkswagen and BMW, would be subject to a 20.7% duty. The commission has an individually calculated rate for Tesla of 7.8%.
Third, EU tariffs do not apply to Chinese made hybrids
A Forbes article. Is Forbes anti-EV; pro IC? Or perhaps it is just the author of the article?
The European Union has been travelling down a cul-de-sac as it tries to force its citizens to buy electric vehicles they don’t want and can’t afford, but now it’s decided to promote small EVs to convert the public.
The EU is about to water down its all-electric mandate for 2035. European Commission President Ursula von der Leyen also wants to incentivize small EV car production – so-called e-cars, a decision it should have taken years earlier.
I don’t believe the assumption is an inevitability.
This year the target is a market share of 28%. Manufacturers that fail to meet the target will pay fines. Overall, the industry is way behind this target and only expected to reach between 35% and 50% by 2030. If sales are to accelerate towards compliance there has to be a mass market. Small, affordable cars are a prerequisite.
Now the above is currently true. And EVs in the EU are a bit more pricey than ICs. So it does seem to make sense that smaller cheaper EVs would attract IC holdouts and “cheap” or should I say “thrifty” customers plus those of lesser financial means to switch to an EV.
CHINA!:
Danger to EU labor demand and EU legacy automakers.
There’s a phrase that Valeo CEO Christophe Perillat said during his presentation at the IAA Mobility Show last week that will breathe cold air down your back in a blizzard: “When an industry is gone, it’s gone, it doesn’t come back."
He’s talking about Europe’s auto industry. Specifically, the double-gut-punch threats it faces—not just from a significant shift away from combustion engines towards EVs (and the potential factory automation that comes with it), but also the looming threat of inbound Chinese EVs that could undercut everything that the European automaker has to offer.
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Nissan follows Toyota, which is now sourcing Chinese parts to build EVs for global markets from its production base in Thailand. Volkswagen, Mercedes-Benz, BMW, Audi, Ford, and several other major global automakers have announced similar plans to either learn from or use tech from China to apply on a worldwide scale.
The above suggests, to me anyway, that China has the premier EV automaking ability.
Legacy automakers are playing catch-up.