In June 2024, the European Union (EU) announced big new tariffs on electric vehicles produced in China. Among other details and clarifications, plug-in hybrids were not included. The high tariffs would only apply to fully electric cars. On a continent trying to electrify the auto industry pretty quickly, that seemed counterproductive. And it was. Yes, clearly, European automakers were trying to protect themselves from cheap Chinese electric cars with long range and great tech. However, the market pressure of those cheap Chinese electric cars with long range and great tech certainly would have pushed legacy automakers to build better, cheaper electric cars faster.
However, there’s still a twist to all of this. Automotive New Europe published an article yesterday titled “EU tariffs on Chinese EVs to protect European automakers may have had the opposite effect.” Hrrmm. What is this all about? The intro teaser text adds, “Only a year after the EU imposed punitive tariffs on Chinese electric cars that were meant to protect the market share of European brands, Chinese automakers have increased their overall sales in Europe by 93 percent.”
The rest of the article is behind a paywall, but that was enough of a clue. We publish the most comprehensive European EV sales reports on the internet, and we’ve been noticing the trend as well. In October, BYD’s sales were up 207% year over year. It now has 4.7% of the European EV market. That’s barely less than Tesla!
“Last year’s tariff increases from the EU on Chinese BEVs weren’t exactly a surprise. What was a surprise was that plugin hybrids weren’t affected by the rising tariffs, which caught most Chinese OEMs by surprise. Previously, they had been betting in launching BEV models in Europe, with the PHEV market being an afterthought. But this seems to be changing, as the BYD Seal U PHEV’s success shows,” he wrote. “Comparing the best selling Chinese BEVs’ competitiveness to the local competition, and then doing the same for the best selling Chinese PHEVs, we notice the difference that increased tariffs make and the reason why I think China’s top OEMs will focus on the PHEV market in the near future.”
Well, just read that whole article.
The overall point, however, is that while Chinese BEVs are quite similar to European BEVs when looking at specs and vehicles class compared to price, Chinese PHEVs significantly outcompete European PHEVs on these things. So, unsurprisingly, this is an area Chinese automakers have put more and more focus on, and those highly competitive PHEVs are jacking up Chinese OEM sales in Europe.
The mystery is how EU politicians and regulators figured they needed to slap huge tariffs on Chinese BEVs but didn’t bother at all with Chinese PHEVs. Maybe automakers just didn’t think PHEVs would threaten their core fossil-fueled vehicle business or their EV business. Maybe EU regulators therefore just narrowly focused their research on potential BEV production subsidies from the government but ignored PHEV production subsides. Or maybe they just didn’t find significant PHEV production subsides? In any case, yes, Chinese plugin vehicles are growing fast in Europe thanks to highly competitive PHEV offerings, and in the meantime, some of these companies are building BEV factories in Europe so that their BEVs won’t face those high tariffs either.
Source: cleantechnica