Despite protectionist tariffs, electronic vehicle (EV) sales in China and Europe led the global market in the first quarter. Sales in China reached 2.4 million units, a 36 percent year-on-year increase. Europe recorded sales of 900,000 units, a 22 percent increase, according to EV research company Rho Motion.
As two major EV markets, strong performances in China and Europe significantly affect the global market. Challenges like Europe's tariffs on Chinese EVs and US auto tariffs persist, yet both regions show robust potential. If Europe reduces protectionist measures, cooperation between these markets could further boost the EV sector.
Key common factors driving EV sales in China and Europe include policy support, market demand and industrial competitiveness, which could further foster cooperation in this sector. Despite existing disputes, the development of EVs in the two markets is expected to accelerate as collaboration strengthens.
From an industrial complementarity perspective, strengthening cooperation between the Chinese and European automotive industries can enhance the competitiveness of the entire supply chain and expand the scope of the market. Despite the obstacles posed by the EU's tariffs, Chinese and European vehicle makers continue to demonstrate a strong commitment to deepening cooperation.
Europe's misguided measures of trade protectionism under the guise of "anti-subsidy" actions face continuous strong opposition from political, business and academic circles in the continent. In the face of adverse conditions, Chinese automotive companies remain steadfast in efforts to deepen their presence in the European market, winning consumer favor with high performance, cost-effectiveness and green environmental concepts. Chinese and European automotive companies continue to adhere to the principles of shared benefits and deepen cooperation in the industrial and supply chains.
First, the share of Chinese and European cars in each other's markets reflects a profound integration characterized by mutual benefits and win-win cooperation, rather than a zero-sum competition.
Data from auto industry data and analytics provider JATO Dynamics indicate that in 2024, the registration of Chinese-made vehicles in the European market exceeded that of Japanese and British vehicles, positioning China as the sixth-largest source country for newly registered vehicles. However, with a market share of only 4.9 percent, this development does not represent the "threat" suggested by certain Western media outlets and politicians.
Also in 2024, China's total vehicle sales exceeded 27 million, with European brands enjoying significant growth opportunities. Despite fluctuations in market share, European brands maintain a strong presence in the Chinese market. For instance, China remained Volkswagen's largest market in 2024, with 2.9 million deliveries accounting for around 32 percent of the brand's total sales.
Second, regarding industrial chain cooperation, despite the EU's anti-subsidy tariffs on Chinese EVs, companies from both regions are actively pursuing industrial chain cooperation. European automotive firms, suppliers and dealers are investing in and forming strategic partnerships with Chinese companies, fostering two-way collaboration. For instance, in December 2023, BYD announced plans to build an EV factory in Szeged, Hungary. The same month, Volkswagen completed the acquisition of a stake of about 4.99 percent in Chinese EV maker Xpeng for $700 million and agreed on a strategic partnership to develop new models.
The European EV market is hindered by challenges such as protectionist tariffs and high costs. To foster EV development, the EU needs to maintain global trade openness and ensure a fair competitive environment. Expanding industrial and trade cooperation with China is essential for driving innovation and growth in the sector. Imposing tariffs on Chinese EVs is counterproductive and detrimental to Europe's energy transition.
A video conference was held between Chinese Commerce Minister Wang Wentao and EU's economy commissioner Valdis Dombrovskis on April 8, where they agreed to initiate negotiations on EV price commitments, according to a report by Yuyuantantian, a social media account affiliated with China Media Group, on April 13.
The future of the automotive industry lies in electrification, and tariffs on Chinese EVs would be a misguided choice that could lead to protectionism. It is crucial for European policymakers to remain rational and adjust their strategies to avoid these traps.
