Chinese EVs nab record 11% share in Europe ahead of tariffs

Chinese brands captured 11 per cent of the European electric car market in June, notching record registrations as manufacturers raced to beat stiff European Union tariffs that took effect early this month.

SAIC Motor Corp. led the charge, shipping its MG4 hatchback to dealers in volume, according to analysts at researcher Dataforce, which compiled the figures. Cars registered before July 5 could be sold on to customers without the added duties on imported EVs.

Chinese brands registered more than 23,000 battery-electric vehicles across the region during the month, the most ever, Dataforce figures show. Their 72 per cent sequential jump from May was twice the gain in overall European EV registrations for June. Chinese-made imports from Western manufacturers including Volvo Car AB, BMW AG and Tesla Inc. are also subject to the new levies.

Whether the volume gains can be sustained will be closely watched in the coming months, as the added EU tariffs take hold. The EU’s provisional charges subject SAIC to an additional 38 per cent fee, while BYD will pay an extra 17 per cent on the existing 10 per cent customs duty.

Carmakers on both continents are rushing to add European EV manufacturing so they can avoid the new duties, while tensions between Beijing and Brussels risk devolving into a trade war.

While state-owned SAIC was responsible for the biggest jump in Chinese-branded imports, some 40 per cent of the MG4s registered in June were self-registrations by dealers — “not a very healthy growth," said Gabriel Juhas, head of product at Dataforce.

The carmaker is offering generous leasing deals, including a two-for-one MG4 promotion in Germany, where EV sales have sputtered.

Conversely, there were signs of durable progress for BYD Co., the world’s largest plug-in vehicle maker. A marketing push centred on the Euro 2024 football tournament held in Germany gained real traction with consumers, said Julian Litzinger, a Dataforce analyst.

Another driver of the European EV market in June was the introduction of incentives in Italy, which helped to spur a doubling of battery-electric sales in the country from a year ago. About €200 million in new EV subsidies ran out in less than nine hours, the government said in a statement. About 60 per cent was tapped by families and the rest by companies.

The rise vaulted Italy, which has been lagging in EV sales, into the top six of a regional market that includes EU states, countries like Norway and Switzerland that participate in its single market, and the UK.

European policymakers are trying to strike a balance between easing access to less-expensive Chinese-made EVs that would aid progress toward sustainability goals and protecting the legacy automaking industry in a tough economy.

Germany, for example, is struggling to generate meaningful growth, making higher-cost EVs from BMW, Volkswagen AG and Mercedes-Benz Group AG less affordable to strapped consumers.

In Italy, the government has cracked down recently on imports found to be branded as Italian-made. Prime Minister Giorgia Meloni is also courting Chinese President Xi Jinping, visiting China this week to smooth the relationship as her government seeks to attract Chinese manufacturers.

European carmakers have also joined forces with Chinese counterparts. Stellantis said Tuesday that it began shipping EVs from China under a joint venture with Zhejiang Leapmotor Technology Co. The JV has already started assembling pre-production EVs at a Stellantis plant in Poland.

Overall, June was the third-highest month ever for EV volumes with 208,872 registrations across the region, according to the European Automobile Manufacturers’ Association, behind December 2022 and March 2023, and just ahead of June 2023.

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