In recent years, the European automobile industry has been threatened by the rise of Chinese electric cars. Chinese brands have entered the European market with force, offering affordable electric cars with good features.
In 2023, Chinese electric cars will represent 8% of registrations in Europe, up from 4% in 2021. This trend could continue in the coming years, as China is the world's leading producer of electric cars.
There are several reasons why Europeans are buying more Chinese electric cars. First of all, Chinese electric cars are more affordable than European ones. Secondly, Chinese brands offer a wide range of models, from city cars to SUVs. And thirdly, Chinese brands are investing in research and development and their cars offer better quality and better features every day.
Europe has a great challenge in trying to protect its automobile industry from the competition that comes from the rise of Chinese electric cars.
One option would be to offer subsidies for the purchase of European electric cars. This would help reduce the price of European electric cars and make them more competitive against Chinese ones.
Another option would be to regulate Chinese electric cars. This could include measures such as imposing tariffs or requiring it to meet European safety and emissions standards in its manufacturing. Which they have already threatened to carry out.
Europe could also support research and development of European electric cars. This would help improve the competitiveness of European brands and reduce their dependence on imports.
The European automobile industry has several competitive advantages that could help it maintain its market share. These advantages include:
- A solid industrial base
- An established supply chain
- A qualified talent
- A large domestic market
But it also has a big drawback: the European automobile industry has been asleep for too long and has not invested with enough energy in the electric car, because fuel cars gave it, and still give it, very juicy profits.
Now that the electric car is more than a reality and that the Chinese dominate the market (more electric cars are manufactured in China than in the rest of the world) some are raising their voices because the European automobile industry with many thousands of jobs and great importance economically, runs the risk of being seriously affected.
And the solution should not be to increase taxes so that citizens pay more for cars, but to make an industry that has rested on its laurels to be competitive, and reconvert it as was done with the steel industry many years ago. With the sacrifices that have to be made.
In Europe there is technology and knowledge to have companies that develop and manufacture batteries, as well as cars. Something that the Chinese started doing more than 10 years ago, and that is why they now dominate battery manufacturing worldwide.
Miracles do not exist in the industry. There are the right strategies, hard work, and investments to fulfill those strategies. And that in Europe has not been done with the electric car or with the batteries that power them.
The automobile industry could get out of the hole it is in, but not by the easy route of requesting additional taxes for its competitors. But fighting in the market with good products at good prices.
Europe could adopt specific strategies to protect its automobile industry, and these strategies could include:
- Support innovation in batteries and other key components of electric cars. This would help European brands reduce their dependence on Chinese suppliers.
- Promote cooperation between European companies in the sector. This would help European brands reduce costs and develop more competitive products
- Strengthen cooperation between European governments. This would help Europe take a stronger position in trade negotiations with China.
We will see what happens in the near future, but the European automobile industry has a great challenge ahead, and the cause is not external, but the stupid complacency of its managers.
And of course everything said for Europe could also be applied to the USA, since practically the same thing has happened there.
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