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Last month, two of the top five best-selling EVs were imported from China.
June 28, 2024 in 3pm ET
The latest European EV registration data reveals that Chinese-made models are already approaching a fifth of the total EV segment.
From the perspective of the domestic auto industry, this worrying sign is compounded by the overall slump in sales.There seems to be a clear answer behind the imposition of tariffs on Chinese-made electric vehicles.
Europe protects industry
European EV sales have been weakening recently and this will not change easily unless more affordable models are developed. Chinese-made EVs are selling relatively well but are not a sound long-term solution and will have limitations.
According to Jato Dynamics, new car registrations in 28 monitored European markets fell 2.5% year-on-year to 1,087,699 units in May. While this is higher than a few years ago, the market has never fully recovered from its initial pre-pandemic size, remaining at 75-80% of its original size.
The plug-in electric vehicle (PEV) segment also saw a decline of around 9.5% compared to 2018, at 226,665 units, driven by an 11% decline in electric vehicles and a 7% decline in plug-in hybrids.
Number of plug-in vehicle registrations in 28 selected European markets in May 2024:
- BEV: 151,237 units (down 11% from the previous year)
- PHEV: 75,428 units (down 7% from the previous year)
- Total: 226,665 (down 9.5% from last year), market share 20.8%
The price of new electric cars is considered too high, and incentives are being limited or eliminated in many markets. More affordable models from China would be an attractive option to keep the market growing, but the European Union probably doesn’t want to electrify the market at the expense of its own car industry.
According to the report, the number of new registrations of China-made electric vehicles in May increased 25% year-on-year to about 28,000 units, and their share of the EV segment increased to about 18.5% from 13.2% last year.
The 25% increase compared to an overall decrease of 11% indicates that China is expanding rapidly, while registrations of EVs manufactured outside of China were down 16% year-on-year.
In the list of the most registered vehicles, two Chinese-made EVs — the Tesla Model 3 and the Volvo EX30 — round out the top five. The MG4 also makes it into the top ten.
Another shocking revelation is that the Tesla Model Y, which is locally produced in Europe, saw a massive 46% decline year-over-year. A separate report from Dataforce found that overall brand sales were down 37%. However, the refreshed Model 3 saw a 25% increase. The Model 3 is expected to grow in the near term before the higher tariffs come into effect.
One of the biggest winners in the first half of the year has been the Chinese-made Volvo EX30, which will be produced locally in Belgium from 2025 (as well as for the delayed US market).
Expansion in China may slow later this year, and MG has already switched focus from EVs to internal combustion engines in Europe, according to Jato Dynamics, perhaps anticipating the challenge of selling the MG4 at a higher price.
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