Chinese electric cars are a threat to Europe. Allianz report
According to Allianz, the "number one risk" for European manufacturers engaged in the development of electric cars is China. All the details
The transition to electric mobility undoubtedly represents a turning point for the global automotive industry, obviously including the European one, where major companies such as Stellantis, Volkswagen, Mercedes-Benz and Renault are based. In 2022, sales of new energy vehicles (a term that includes pure electric cars, plug-in hybrids and hydrogen cars) in Europe reached 4.4 million units, a record share and equal to 47 per cent of the total registrations. The most popular models are the battery electric models (BEV, in jargon), whose sales have grown by 28 percent, equal to 12 percent of registrations.
In a report dedicated to the European automotive sector, the insurance company Allianz writes that, with the ban on the sale of new cars with internal combustion engines approaching, the industry of the Old Continent "is about to undergo a complete change , facing the transformation of its supplier base, changing customer needs, competition from new entrants and the reality of a less car-centric society”.
RISK NUMBER ONE: CHINA
“But the number one risk” for European automakers, continues Allianz, “is China”. In fact, the country began to invest in the electrification of mobility and in the creation of a support ecosystem already about fifteen years ago, and today it is reaping the benefits: in 2022, sales of electric vehicles in China were double those in Europe and the United States combined. In addition, the country has a competitive advantage "in nearly every aspect of the BEV value chain," such as base metal mining and refining, battery manufacturing, and rare earth magnet manufacturing.
CHINESE ELECTRIC CARS WILL REPLACE EUROPEAN ONES, ALLIANZ SAYS
Domestic automakers account for more than 80 percent of EV sales in China. And in 2022, three of Europe's best-selling electric car models were Chinese imports. “When BEVs come to represent all new car sales in Europe,” writes Allianz, “cars made in Europe will likely be replaced by those made in China, regardless of whether they were made by a Chinese, American, or Chinese company. European".
THE ECONOMIC DAMAGE FOR EUROPE
European automakers could lose a total of 7 billion euros in annual net profits by 2030. If Chinese manufacturers manage to increase their market share in China to 75 per cent in the same year, European companies' sales in the country will suffer a decrease of 39 percent. And, again, if in 2030 European imports of Chinese cars reach 1.5 million units, the economic impact on the continent's automotive industry will amount to 24.2 billion euros, 0.15 percent of the country's GDP. Union in 2022.
The impact will be even stronger in countries most dependent on this industry, such as Germany, Slovakia and the Czech Republic: in these cases, the losses could amount to 0.3-0.4 percent of GDP.
WHAT EUROPE CAN DO
Given the economic and employment importance of the automotive industry to the European Union, Allianz thinks policy makers should negotiate with China and the United States (which is generously subsidizing local production ) to get better trade terms.
Allianz then argues that the European authorities should allow Chinese investments in vehicle assembly in the Old Continent to generate more added value. In parallel, "increasing self-sufficiency in critical raw materials for battery production and investing in next-generation battery technologies [such as sodium batteries ] will further help the European automotive sector prepare for tomorrow's challenges" .
– Read also: Can we do without China for electric car batteries?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/cina-auto-elettriche-impatto-europa/ on Sun, 04 Jun 2023 15:32:05 +0000.