Chinese carmakers flood the European market with electric vehicles
AYESHA RASCOE, HOST:
More and more European drivers are going electric. And this has given rise to an unlikely competitor for traditional European carmakers - Chinese electric vehicle makers. Cars made by BYD Co., which stands for Build Your Dreams, have surpassed Tesla in sales. NPR's H.J. Mai reports European carmakers are considering this an existential threat.
HJ MAI, BYLINE: Sjoerd Janssen is a typical European car buyer. He and his family live near a big city with reliable transportation.
SJOERD JANSSEN: I'm eight minutes from the center of Copenhagen by train.
MAI: But they still wanted a family car, and so they went looking. Janssen, like many others in Europe, decided that his next vehicle will be an electric one. It's a mindset driven by environmental concerns and generous government incentives. They thought about getting a Tesla, a Nissan or a Volvo.
JANSSEN: We were actually going for the Volvo. And then we then saw this offer from BYD, which was, I think, about 20% lower than the Volvo.
MAI: Janssen said he'd never even heard of BYD before - a Chinese brand that officially launched in Europe in 2022.
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UNIDENTIFIED PERSON: We are BYD. You've probably never heard of us, but hey, we know you just want to drive a great electric car.
MAI: Chinese automakers, within just a couple of years, have flooded the European market with their cars. Customs data shows that Chinese EV shipments to the European Union have increased by 361% since 2021. For Janssen, the BYD offer was simply too good to pass up.
JANSSEN: Not only was the price 20% lower. You also got 8,000 euros in goodies like free charging for two years and free tires. So it was hard to resist, to be honest.
MAI: China has emerged as the world's largest market for EVs with millions of domestic sales. And it has done so by boosting its domestic auto industry with a mix of big financial help from state subsidies to substantial tax breaks, says Mark Wakefield of global consulting firm AlixPartners.
MARK WAKEFIELD: They've really led the way. They've gone, really, past that early adopter phase, and they're into the mass market.
MAI: In Europe, Chinese EVs still have to overcome a perception of poor quality. But as Wakefield confirms, today's cars from China are much improved.
WAKEFIELD: These are very advanced vehicles. They are not quite up to the quality standards that the U.S. and European vehicles are. But they've come a long way, and the difference is now pretty negligible.
MAI: And sales for Chinese carmakers in Europe have surged. The MG4 hatchback produced by Chinese-owned MG has been among the top-selling EVs in Europe during the first half of the year. Others, like NIO, BYD or Geely also have substantially increased their market shares. And that's created a lot of concern in Brussels. The European Union this year launched an investigation into China's alleged unfair trade practices, as Commission President Ursula von der Leyen explained.
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URSULA VON DER LEYEN: And their price is kept artificially low by huge state subsidies. This is distorting our market.
MAI: Beijing responded, calling the move blatant protectionist behavior. Janssen's message to European automakers is simple - make cheaper cars or lose customers like him.
JANSSEN: We are in a globalized world, so you cannot really prevent the people making cheaper things coming into your country. Of course, you can use protectionism. And so - but that's just cheating on your inhabitants, you can say, right?
MAI: Janssen himself is happy with his purchase, having driven more than 10,000 kilometers in less than five months. Some European automakers had to announce price cuts or even layoffs to remain competitive in the rapidly changing EV market. And Europe is just a starting point, as most Chinese brands aim to enter the U.S. market in the coming years, potentially disrupting America's auto industry.
H.J. Mai, NPR News. Transcript provided by NPR, Copyright NPR.