The European automotive industry has found an important production hub for its electric vehicles (EVs) in China.
According to a recent analysis by Transport & Environment (T&E), almost one-fifth (19.5 percent) of the EVs sold in Europe last year were manufactured in the Asian giant, and this figure is projected to reach 25 percent in 2024.
While this number is not exclusive to European automakers, it still indicates a significant predominance of cars assembled in China, where European companies locate much of their production.
Which manufacturers are leading this trend, and what flagship models are rolling off Chinese assembly lines to conquer the global market?
BMW, the renowned German brand, manufactures its iX3 electric SUV at the Brilliance plant in Shenyang.
Similarly, Citroën, originating from France, produces its C5 X model at the Stellantis plant in Chengdu.
Additionally, another French manufacturer, DS, assembles the DS 9 at the Changan Automobile plant, also in Shenyang.
Meanwhile, DR Automobiles has chosen to remanufacture several of its models in China, based on original European designs.
Likewise, MG Motors, the British brand under the ownership of SAIC Motor, produces numerous electric models in the Asian country.
Many of these vehicles are exported and marketed in Europe, demonstrating the globalization of automotive production.
Furthermore, Cupra, the Spanish company, plans to begin production of its Tavascan electric SUV in the “Land of the Dragon” in 2024.
Meanwhile, Dacia, a Romanian brand of the Renault group, manufactures its urban electric vehicle Spring at the Shijiazhuang plant, aiming to offer an affordable electric mobility solution in Europe.
Volvo, the iconic Swedish brand, assembles models like the XC40 and XC60 at the Luqiao plant, owned by Geely.
Polestar, another premium Swedish brand and subsidiary of Volvo, also uses this plant for the production of its electric cars.
Finally, Smart, the German joint venture between Mercedes-Benz and Geely, produces its electric cars both at the Hamburg plant in Germany and at Ningbo.
Why do European brands manufacture in China?
Economic factors play a crucial role in the decision of European brands to manufacture electric cars in China.
Firstly, production costs, including labor, are significantly lower compared to Europe.
This difference allows European brands to produce EVs at a more competitive price.
Forvia mentioned last year that automakers in China can develop an electric vehicle for 10,000 euros (approximately 10,618 dollars) less than their European counterparts, explaining the phenomenon.
According to a study by JATO Dynamics, while the average price of BEVs in Europe increased from 48,942 euros in 2015 to 55,821 euros, and in the USA from 53,038 to 63,864 euros, in the Asian giant, it decreased to 31,829 euros from 66,819 euros, positioning below the cost of petrol units.
This phenomenon caught the attention of the European Commission authorities, who have initiated an investigation into a possible government subsidy, alleging that it would mean unfair competition.
Recently, they reached the provisional conclusion that should conversations with Chinese representatives take place and be negative, preventative tariffs would be imposed to equalize costs.
Similarly, returning to the previous point, China has an extensive and highly developed supply chain for the manufacturing of zero-emission cars, facilitating European companies in finding the necessary components and materials.
On the other hand, from a market perspective, the demand for electric units in the Asian country is accelerating rapidly.
China is projected to become the largest market in the world for electric cars in the coming years.
Chinese electric vehicle brands are quickly gaining ground, which motivates European brands to establish manufacturing operations in tha Asian country to maintain their competitiveness.
Additionally, there are other factors that also influence the decision to manufacture in this country.
China is at the forefront of technology, offering brands access to the latest innovations and developments in this field.
Finally, Chinese corporations possess extensive experience in EV manufacturing, allowing European brands to partner with them and benefit from their knowledge and technical skills.
