Europe Must Defend Its Industry to Avoid Losing the Battle against China

Europe has in the automotive sector one of the most important and relevant industries in the market. Manufacturers contribute large amounts of money to the public coffers, in addition to adding hundreds of thousands of jobs and billions in innovation and development. All that putting down the drain if the European Union does not take action to help its industry. The battle against China begins to uneven in favor of the Asians. An international study demonstrates the need for support from the rulers so as not to endanger a main sector.

At the end 2021, the European Union took a very important step. The plans of the old continent are to transform the automobile industry from its foundations. In 2035 Europe will ban the sale of any car that is not electric, although as we know there will be some exceptions. European citizens will only be able to count on electric cars, although this important step may trigger a series of events that are difficult to resolve. This is highlighted in a report by the climate group Transport & Environment.

It is not at all strange to report on the deviation of the production of some brand. From time to time news emerges that suppose an increase of influence of the Chinese market. Many brands are choosing to decentralize the production of their electric models in order to reduce costs. In China the production is very cheap, the public bodies put many facilities to the brands to take the factories there or sign alliances with other local manufacturers. A strategy that in recent years has aroused more and more interest.

Europe seems to be suffering from a slowdown in its electricity strategy. Although the monthly figures are getting better, the estimates are not being met. The plans specified that by the end of the first half of 2022 13% of car sales would be fully electric, but at the end of June it had reached 11%. Two points less than expected that can mean a small break in sales. The crisis in Eastern Europe, the lack of components and the boom in electricity and fuel prices may be the main causes.

The weight of Chinese brands is not yet a big problem, but if Europe does not support its industry the landscape can change quickly. In the first half of 2022 only 5% of electric car sales came from Chinese brands, a small percentage, but not without concern. The study reveals that by 2025 the presence of Chinese brands would reach a market share of 18%. That means that in just three years the sales of Asian models within the territory of the European Union could quadruple.

T&E aims for stimulation in production and greater support in the transition. Tax credits, discounts and other incentives could help the European customer maintain trust in continental brands. Price is undoubtedly a determining factor. Manufacturers such as BYD, NIO or XPeng are able to offer cars with advanced technology and high performance for a significantly lower price than similar European rivals. In the future, the strategy of Chinese brands will expand the available offer, reaching segments as important as those of utility and compact.