News / Despite tariffs, EU will need Chinese electric vehicles to hit emissions target

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Forwarders believe tariffs on China will not halt the growth of its electric vehicle (EV) sales into the European Union, despite figures this week pointing to sales levelling out.

Following several years of major gains, Bloomberg has cited numbers from automotive researcher Dataforce that Chinese automakers held a 7.8% share of sales of new EVs in the EU in January, a sixth consecutive month within the 7.5-8.5% range.

The report noted that the plateauing has coincided with EU tariffs on Chinese-made EV imports.

However, speaking to The Loadstar, two forwarders in the market suggested that the long-term prospects for Chinese automotive exporters into the European market were looking positive, against a wave of uncertainty out of the US.

One said: “EU legislation leaves it reliant on Chinese makers if it is to meet its environmental target [of a vehicle emissions ban by 2035].”

The union’s aim to hit zero on the sale of new vehicles that harm the environment, uses a graduated approach, with a 15% reduction this year, followed by 55% in 2030.

Hauliers in particular have thrown scorn on the scheme, one telling The Loadstar that the lack of charging points for, and exorbitant purchase price of, EVs made them unviable for truckers.

And member states’ domestic manufacturing capacity to meet the targets has also been questioned, although the aim retains support from  EV makers, including Polestar and Rivian, as well as Maersk, Uber and Volvo as long as there is “regulatory stability”.

The forwarders told The Loadstar they don’t believe the timeframe is long enough for either Europe or other nations to catch up with Chinese output.

“Even if the Europeans upped tariffs on Chinese cars by 50%, their firms would be able to swallow this – maybe the end customer would suffer, but they would still be paying less than they would for a European equivalent.

“It is simply that the scale of Chinese EV production has put it in pole position; nobody can replace China on scale or quality.”

Nonetheless, one forwarder said, while the EU needed China to meet its targets, China also needed Europe to sell its cars to.

While Bloomberg’s report suggests a levelling off of EV sales in the EU, Chinese vehicle sales overall appear to be making significant headway.

Automotive analyst Jato Dynamics reported a 52% increase in registrations of China-made cars, with 37,000 recorded, against an overall 2% year-on-year drop in total vehicle registrations in January.

According to Jato, the segment driving the growth was hybrid vehicles (HEVs), which are not exposed to EU tariffs. It noted: “Almost 7,500 HEVs registered in January were Chinese brands, accounting for 6.1% of the HEV market.”

Plug-in hybrids recorded a 218% year-on-year increase in January, with 4,035 new models registered.

One big loser from the tariff war appears to be  US maker Tesla – owned by Mr Trump’s unofficial right-hand man, Elon Musk – Jato noting sales into the EU slumping 45%, year on year, which “can largely be attributed to the upcoming model changeover of the model Y, alongside its owner’s increased involvement in mainstream politics”.