German market share is stagnating
China’s electric car manufacturers are stuck at the starting block
By Lukas Wessling
April 21, 2024, 9:12 a.m
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The date for the combustion engine’s funeral has been set, and the future on German roads should belong to electric cars. There are repeated warnings: Chinese manufacturers would take over the passenger car market as a result of this transformation. But there is still no sign of this in the admission statistics.
When thousands of electric cars from the Chinese manufacturer BYD rolled off its freighter in Bremerhaven at the beginning of the year, many saw it as a threat: a huge ship, specially built to conquer Europe. But the story of cheap Chinese electric cars taking over the European market is not new.
EU Commission President Ursula von der Leyen had already complained in her State of the Union speech at the end of last year that Chinese manufacturers were flooding global markets. This is only possible thanks to huge government subsidies. Since then, punitive tariffs have been repeatedly demanded in Germany. However, there is still no sign of China’s dominance on the streets.
The number of newly registered cars in Germany shows: In the first quarter of this year, the share of Chinese makes in all newly registered electric cars rose only slightly – from 4.5 percent to 5 percent, according to data from the Federal Motor Vehicle Authority. The absolute number even fell slightly.
Tesla also had to laboriously build up infrastructure
There are many reasons for the lack of market takeover. Above all, Chinese electric car manufacturers currently lack the infrastructure to export to Germany on a massive scale, says Frank Schwope in an interview with ntv.de. The car expert teaches at the Middle Class University of Applied Sciences in Hanover. According to Schwope, transporting the vehicles to Europe is not enough. Then the work would really begin: “You can’t say, I’m going to bring 3,000 cars to Bremerhaven on a freighter and then sell them from the port,” says Schwope, outlining the size of the task that the Chinese manufacturers are now facing.
Polestar, BYD and the others lacked the necessary structures for transport, sales, workshops and service. Networks must be built in all of these areas in order to bring large quantities of vehicles to Germany and to people there in order to repair cars and look after customers. “It’s a process that takes years,” says Schwope. Tesla, for example, also had to laboriously build up this network of authorized dealers, charging points and hotlines.
That customers might shy away from Chinese cars because they come from China? Unlikely for Schwope: “People buy Korean cars, people buy Japanese cars. Why shouldn’t they buy Chinese cars?” In the luxury segment, the emotional connection to German brands plays an important role. But for anyone considering a Mazda, the step to a sophisticated Chinese electric car is not far off. If it then costs 5,000 euros less, that would be a convincing selling point.
Do Citroën and Co. want to be shielded?
According to Schwope, it will probably take a while before this price difference can have its full effect. The general reluctance to buy electric cars, capped premiums, unsettling price discounts and the uncertain timing of the phase-out of the combustion engine: The year 2024 will be a slump year for electric mobility, says Schwope: “But a lot can also be expected from Chinese manufacturers in 2025, if politicians do not impose high punitive tariffs.”
Schwope observes the desire in Europe for a protective hand over the local electric car market. While the Chinese car manufacturers do not represent serious competition for Mercedes and Co. in this country, brands such as Citroën, Peugeot or Fiat face a challenge: their customers are likely to be open to cheap, sophisticated electric cars from China. The French and Italian car industries therefore have an interest in being shielded.
This is exactly what German manufacturers fear. The bosses of Mercedes, BMW and VW are clearly against punitive tariffs. If the European Union were to impose taxes on Chinese manufacturers, China would probably do the same, particularly hurting Porsche, BMW, Audi, Mercedes and VW. Citroën, Renault and Fiat, on the other hand, could not care less about entry restrictions for the Chinese market: “They never really got their foot in the door,” says Schwope.
How justified the fear of the emerging Chinese wave of electric cars is will only be clear in the coming years; when BYD and Co. have found enough car dealerships, workshops and charging stations that sell, repair and refuel their cars. Then It remains to be seen whether Citroën, Fiat and Renault and possibly even VW, Mercedes and Audi will come under the Chinese e-car tires.