Chinese EV Registrations in EU Drop 45% Amid Tariff Hikes, But Market Share Remains Strong

EU import tariffs cause a 45% drop in Chinese EV registrations in July. Despite this, Chinese automakers continue to grow in market share across Europe.

A recent report by Dataforce reveals a significant 45% drop in the number of electric vehicles (EVs) manufactured in China and registered in 16 EU countries between June and July 2024. The decline coincides with the introduction of increased import tariffs imposed by the European Commission, aimed at protecting the European automotive industry from heavily subsidized Chinese competitors.

Chinese EV registrations in the EU plummet by 45% in July due to new import tariffs, yet market share growth continues. Photo: Unsplash

The report, which aggregates registration data from 16 of the 27 EU member states, indicates a sharp reaction from Chinese automakers who were likely prompted to clear their inventories before the new tariffs took effect. These tariffs, which can reach up to 48%, are part of the EU's strategy to level the playing field for European manufacturers facing competition from state-supported Chinese brands.

Related: European Car Sales Rebound in April, But Electric Vehicle Growth Slows

A Berlin-based automotive market analyst highlighted that not only Chinese manufacturers were impacted by the tariff hike. Major global brands like Stellantis, BMW, and Tesla, all of which produce EV models in China for the European market, also experienced disruptions. However, these companies were reportedly more cautious in managing their inventories leading up to the tariff implementation, potentially mitigating the impact on their European operations.

Despite the downturn in registrations in July, the report suggests that Chinese automakers have not diminished their ambitions to expand in Europe. Bloomberg notes that brands like MG Motor and BYD have consistently grown their presence in the European market. Since the beginning of 2019, Chinese automakers have steadily increased their market share, reaching 8.5% in July 2024, up from 7.4% in the same month the previous year. Notably, BYD's sales have tripled across the 16 monitored markets, showcasing their resilience and determination to gain a foothold in Europe.

The new tariffs represent a significant challenge for Chinese EV manufacturers as they navigate the increasingly protectionist environment of the European Union. However, their continued market expansion underscores the competitive quality and appeal of their vehicles, even in the face of rising barriers.

Source: Bloomberg