Sat. Sep 23rd, 2023
    China-Europe Alliance Can Boost the European Automotive Sector

    For the past few days, there have been rumblings of a trade war between the European Union and China over electric cars. The EU accuses China of distorting the game by inflating the market with millions of dollars in public funds to launch their brands internationally, posing a risk to the European industry. However, some experts see this situation as a potential for boosting the European automotive sector.

    Dong Yang, Vice President of China’s leading expert group on electric cars, EV100, has indicated that as Chinese exports of electric vehicles grow, Western groups should seek beneficial relationships with local companies. Dong suggests that Chinese battery suppliers should deepen their ties with European companies and build a battery supply chain in China and Europe.

    European car manufacturers can also leverage China’s electric car technologies to accelerate their transition to electrification, gaining efficiency and competitiveness in the international market.

    Ursula von der Leyen, President of the European Commission, has accused China of flooding global markets with electric cars at artificially low prices due to massive state subsidies and initiated an investigation that could result in tariffs.

    In response to this situation, European manufacturers are taking the first steps towards collaboration, such as Volkswagen’s investment in the startup Xpeng, which will result in the joint development of two new models based on the Chinese manufacturer’s electric vehicle platform. Other manufacturers, such as LeapMotor, are also seeking to license their electric vehicle technologies to foreign partners, such as Audi.

    China warns of possible retaliation if the EU imposes protectionist measures against electric cars produced in the Asian country.

    On the battery front, CATL already has a plant in operation in Germany and is preparing another one in Hungary. Its main competitor, CALB, also plans to establish battery production facilities in Europe by 2026.

    The European industry has been burdened by a traditional way of designing electric cars that has not met customer demands and has led to absurd prices. An alliance between China and Europe can boost a declining European automotive sector that has been closing plants and reducing production while Chinese groups continue to grow.

    Sources: EV100, Munich Motor Show