China has become the largest exporter of cars in the world in 2023, in particular thanks to the lead taken by its industry in the production of low-cost electric vehicles. A rise in power which obviously makes certain players in the automobile industry cringe.
The European Commission took up the subject and opened an anti-subsidy investigation into electric vehicles from China at the end of 2023. It could lead to economic sanctions against electric cars made in Chinasuch as an increase in customs duties.
However, several players in the European automobile industry are hostile to such an eventuality. And the fact that more and more of them are producing electric vehicles in the Middle Kingdom does not constitute their main argument.
A risk of blowback from Beijing
Thus, on the occasion of the presentation of the quarterly results of the BMW group, its CEO Oliver Zipse, quoted by Reuters, declared to journalists that“we can very quickly shoot ourselves in the foot”. He told analysts that operating globally gave large automakers an industrial advantage and that “you can easily jeopardize this advantage by introducing import customs duties.”
In short, Oliver Zipse fears the response from Beijing, which had already warned Europe against the fact that sanctions on electric cars produced in China would have “a negative impact on economic and trade relations between China and the EU”.
Furthermore, if the Chinese automobile industry is now making a place in Europe, certain European manufacturers are already very present in China, which has become the largest automobile market in the world. China thus represented 32% of the BMW group’s sales in the first quarter of 2024, becoming its second market after Europe.
Rapid electrification or economic protectionism, we must choose
“There is always some kind of retaliation”declared Thomas Schaefer, CEO of the Volkswagen brand, during the Future of the Car Summit in Financial Times.
Problem, while Europe is pushing its industry to electrify at full speed and despite initiatives aimed at strengthening European sovereignty in the production of electric car components, “there will not be a single car in the EU that does not contain components from China”estimates Oliver Zipse, concluding that“there is no Green Deal in Europe without resources from China”.
As soon as the European Commission’s anti-subsidy investigation opened, Ola Källenius, CEO of the Mercedes-Benz group, explained on Bloomberg Television that economic sanctions applied to electric cars produced in China would constitute “a risk for manufacturers and global automotive supply chains”.