Tag Archives: Europe

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Europe vs. China, Round Two: This Time It’s About EV Prices

For a brief moment, it looked like the European Union and China might be done trading punches over electric cars. This week, both sides announced they’ve agreed on steps to defuse their simmering dispute over Chinese EV imports—steps that sound cooperative on paper but leave plenty of sharp edges in practice.

The headline is this: instead of simply slugging Chinese-made electric vehicles with tariffs as high as 35.3 percent, the EU is preparing guidelines for minimum import prices. In theory, those price floors are meant to neutralize the effect of Chinese government subsidies without slamming the door entirely on affordable EVs. In reality, it’s a complex compromise that raises as many questions as it answers—starting with whether those tariffs actually go away.

So far, no one’s saying.

China’s Ministry of Commerce framed the agreement in grand terms, calling it a win for “the healthy development of China-Europe economic and trade relations” and for the rules-based global trade order. That’s diplomatic code for please stop escalating this. From Brussels, the message is more procedural: manufacturers can submit price undertakings, the European Commission will review them “objectively and fairly,” and everything will—supposedly—align with World Trade Organization rules.

If that sounds bureaucratic, it’s because it is. The EU’s own guidance acknowledges that today’s EV market is wildly diverse, meaning a one-size-fits-all minimum price won’t work. Instead, model-specific thresholds would be set at levels “adequate to eliminate the harmful effects of subsidies.” Translation: cheap Chinese EVs can still come in, but not too cheap.

This entire standoff exists because Chinese automakers have gotten very good—very fast—at building electric cars that undercut European rivals on price. Brussels argues that this advantage isn’t purely about efficiency or scale, but about state support. The list of alleged incentives is long and familiar: low-interest loans from state banks, discounted land for factories, tax breaks, subsidized materials, and guaranteed demand via state fleet purchases. Stack all that together, and you get EVs that arrive in Europe with price tags legacy automakers can’t easily match.

The U.S. response to the same phenomenon was blunt-force: a 100 percent tariff that effectively walls off the American market from Chinese EVs. Europe can’t afford to be that absolutist. The EU has legally binding climate targets—cutting greenhouse-gas emissions by 55 percent by 2030—and hitting those numbers requires lots of electric cars, including affordable ones. Blocking Chinese imports entirely would make that transition slower, pricier, and politically messier.

And here’s the twist that often gets lost in the rhetoric: a significant chunk of “Chinese” EV imports into Europe aren’t from Chinese brands at all. The value of battery-electric cars imported into Europe jumped from $1.6 billion in 2020 to $11.5 billion in 2023, and much of that volume comes from Western automakers building cars in China. Tesla and BMW both ship China-built EVs to Europe, which means trade barriers can boomerang back onto Europe’s own champions.

Despite the tariffs already in place, Chinese brands keep gaining ground. In the first half of 2025, Chinese-made vehicles accounted for 6 percent of total EU car sales, up from 5 percent a year earlier, according to ACEA and S&P Global Mobility. That may not sound seismic, but in a mature market like Europe, a one-point gain in a single year is significant. EU-based manufacturers still dominate with a 74 percent share, and Germany remains the production heavyweight, but the trajectory is what worries policymakers.

Consultants at AlixPartners estimate that by 2030, Chinese automakers could double their European market share to around 10 percent. That’s not an existential takeover—but it’s enough to pressure margins, accelerate price wars, and force faster innovation from incumbents.

So where does this “agreement” actually leave us? Somewhere in the gray zone between protectionism and pragmatism. Minimum price rules may blunt the sharpest edge of China’s cost advantage without fully choking off supply. They also buy time—time for European automakers to get their next-generation EVs out the door, and for Brussels to avoid a full-scale trade war it can’t really win.

In the end, this isn’t about tariffs versus free trade. It’s about control. Europe wants cheaper EVs, but on its own terms. China wants access to a massive market, but without being labeled the villain of the global energy transition. For now, both sides are pretending that carefully worded guidelines can square that circle.

Whether that truce holds once real cars—and real price tags—hit European showrooms is another story entirely.

Source: ACEA, AlixPartners

News

Why Europe’s Engine U-Turn Helps China More Than Carmakers

For a continent that prides itself on regulatory precision, Europe’s latest decision on the future of the internal combustion engine feels less like a masterstroke and more like a nervous compromise. Yes, the shackles have been loosened. Yes, Germany is celebrating. And yes, combustion engines—fed by synthetic fuels—have been granted a political stay of execution. But if this is a victory, it’s a strangely hollow one.

The four-year struggle over Europe’s automotive future has produced no clear winners. Not the manufacturers, who remain trapped between regulation and reality. Not consumers, who are still being nudged—sometimes shoved—toward electric cars without the infrastructure to support them. And certainly not brands that already committed fully to electrification, only to watch the goalposts move at the last moment.

Polestar wasted no time making its displeasure visible. Quite literally. The Chinese-Swedish EV brand parked three Polestar 4s in front of the European Commission building in Brussels, a rolling protest against what it sees as regulatory backpedaling. It was a rare moment of automotive activism—and a telling one.

Polestar CEO Michael Lohscheller didn’t mince words. His company has bet everything on electric propulsion. There are no combustion platforms waiting in the wings, no hybrids to soften the blow. Europe’s decision doesn’t just complicate Polestar’s strategy—it threatens it. When lawmakers hedge, companies that committed early are left exposed.

The irony is hard to ignore. Synthetic fuels are being positioned as the great compromise, a way to keep combustion engines alive beyond 2035. But this solution comes with a price—literally. Filling a tank with e-fuel will cost significantly more than charging an EV once or twice a week. That economic reality won’t change just because politicians say it should. By the time 2035 arrives—assuming the deadline isn’t delayed again—drivers will be paying dearly for nostalgia.

And yes, there’s already an escape hatch. The decision will be revisited in 2026. If history is any guide, expect more lobbying, more delays, and more uncertainty. No firm deadline has been set for synthetic-fuel engines. Maybe 2040. Maybe 2050. Maybe whenever it becomes politically inconvenient to say otherwise.

Germany is celebrating as if it saved its auto industry. But look closer, and the real beneficiaries aren’t in Stuttgart or Munich. They’re in Shenzhen.

Chinese manufacturers have played this game better than anyone. They entered Europe with electric cars, learned the market, and then rolled out gasoline models and plug-in hybrids with impressive range and aggressive pricing. While European brands struggled to pivot, China simply diversified. The result? Momentum.

The numbers back it up. Forty percent of Chinese vehicle exports are electric. The remaining sixty percent still use internal combustion engines. Flexibility, it turns out, is a powerful advantage.

Stella Li, BYD’s executive vice president, made the situation painfully clear. Europe’s decision, she said, poses no problem for Chinese brands. The assumption in Brussels seems to be that China will slow down—that buying time equals gaining ground. But that time doesn’t exist. China hasn’t stopped before, and there’s no reason to think it will now.

Meanwhile, Europe’s internal contradictions continue to pile up. Some manufacturers argue that the extra time will allow charging infrastructure to catch up. But here’s the inconvenient truth: not a single EU member state has fully met its charging-installation obligations. Governments missed their targets, while manufacturers were forced to transform at speed. The imbalance is glaring.

Consumers feel it most. Battery capacity is marketed like a luxury option, not a necessity. With gasoline cars, you pay for power, but the tank is always the same size. With EVs, range is tiered, priced, and gamified. Add a patchy charging network, and it’s no wonder many buyers remain skeptical.

Brussels also failed to rein in pricing. High EV costs continue to suppress demand, prompting a late pivot toward smaller, sub-4.2-meter electric cars. In theory, these compact EVs should democratize electrification. In practice, they remain too expensive to move the needle. Affordable electric mobility remains more slogan than reality.

Volkswagen’s recent pivot says everything about where this is heading. For months, the company suggested that the Polo would live on in both gasoline and electric form. Then came the reality check. VW CEO Thomas Schäfer put it bluntly: developing new combustion models in this segment no longer makes sense. Future regulations would make them too expensive. The conclusion was unavoidable. No more petrol versions. The small-car market is going fully electric.

That statement lands like a quiet bombshell. Not because it’s radical—but because it’s inevitable.

Europe may believe it bought itself time. But in the global auto industry, time is useless if your competitors are moving faster. The continent now risks pleasing everyone politically while falling behind industrially. Polestar’s protest wasn’t just about one decision. It was a warning.

The future isn’t waiting. And it certainly isn’t idling.

Source: Polestar, Volkswagen

News

BYD Warns Europe’s Carmakers: Split Focus Could Cost Them the EV Race

As Brussels softens its stance on combustion engines, China’s fastest-growing car brand says hesitation—not regulation—is Europe’s biggest threat.

European car makers risk slipping even further behind their Chinese rivals if they continue to hedge their bets between combustion engines and electrification. That’s the stark warning from Stella Li, BYD’s European boss, who believes regulatory back-and-forth is forcing legacy manufacturers to dilute their efforts—while BYD pushes relentlessly in a single direction.

The European Union’s decision to soften its planned 2035 ban on new combustion-engined cars, allowing up to 10 per cent of sales to continue burning fossil fuels, was welcomed by many European manufacturers. Several had argued that EV sales targets were racing ahead of real consumer demand, and that flexibility was essential to protect jobs and margins.

BYD, however, is unimpressed.

“We don’t care about revisions to the green deal, or delaying the ban for combustion cars,” Li said during a London media briefing attended by Auto Express. “Our strategy, from small cars to large cars, is to offer EV and DM-i.”

Growth without compromise

Unlike many European brands, BYD has already abandoned pure combustion cars entirely. Its line-up consists solely of battery-electric vehicles and plug-in hybrids, branded DM-i for ‘dual motor’. Despite—or perhaps because of—this clarity, the company’s European growth has been explosive.

In the first 10 months of 2025, BYD’s registrations in Europe jumped from 36,000 to 138,000 year-on-year, a 285 per cent increase. That momentum comes against a backdrop of stark contrast: EVs now account for around 60 per cent of new car sales in China, but just 16.4 per cent in Europe.

China’s advantage, Li argues, was locked in long ago. A decade-old industrial strategy prioritised battery technology and global supply chains, allowing firms like BYD to scale rapidly while Western rivals hesitated.

“The European Union is trying to push the Green Deal back and forth, then for a lot of auto companies their R&D is back and forth,” she said. “How can they compete with a company like BYD which only believes in one direction?”

Her criticism is blunt: split development budgets mean split results. “Their R&D expense needs to be split into two. You never have enough money to do that, and you’ll never be good at one thing.”

From challenger to giant

BYD is no longer an outsider throwing stones. It has already overtaken Tesla to become the world’s biggest electric-only car maker and now ranks as the third-largest automotive brand globally, behind Toyota and Volkswagen. In total, it has sold 14.5 million ‘new energy vehicles’—EVs and plug-in hybrids combined.

And its ambition is unmistakable. “Our goal is to become the number one global automotive brand,” Li previously told Auto Express.

Europe is central to that plan. By 2026, BYD aims to double its European retail footprint from 1,000 to 2,000 outlets, covering 90 per cent of the market. A wave of new models is on the way, including the Sealion 5 DM-i SUV to rival the Kia Sportage, the Seal 5 DM-i compact saloon, and the Dolphin G, expected to be a small plug-in hybrid SUV.

Made in Europe

Crucially, BYD’s European push will soon be underpinned by local manufacturing. Its new Hungarian factory will begin trial production in the new year, with series assembly scheduled for spring. The first model off the line will be the Dolphin Surf, BYD’s entry-level EV, followed by the Atto 2 small SUV in both electric and hybrid form.

The plant has an installed capacity of 300,000 units, and Li believes BYD will reach that figure in under two years. Local production will not only reduce costs and tariffs, but also give the company a stronger political and industrial voice in the region.

“We haven’t been part of discussions around delaying the ban on new petrol car sales,” Li admits. “But step-by-step, we will start raising our voice.”

Premium ambitions and flash charging

BYD’s European expansion won’t stop at the mainstream. Li confirmed that Denza, the group’s premium brand, will launch in Europe at the beginning of April.

Three models are planned for next year, all featuring high-performance electric platforms, autonomous parking and ultra-fast ‘flash charging’. Among them are the Z9GT estate—positioned as a rival to the Porsche Taycan Cross Turismo—the D9 seven-seat MPV, and the B5 SUV.

Denza’s technology headline is charging speed. Built on a high-voltage architecture, the cars are claimed to recover nearly 250 miles of range in just five minutes. To support this, BYD plans to roll out its own one-megawatt chargers, targeting 300 units in the UK and 3,000 across Europe.

One direction, full throttle

For Li, the lesson is simple: commitment beats caution. While Europe’s established manufacturers debate timelines and hedge their investments, BYD is betting that clarity—and speed—will decide the future of the industry.

“Who is winning?” she asks. In BYD’s view, the answer is already taking shape.

Source: Auto Express