In a recent announcement by the Union of European Football Associations (UEFA), the Chinese electric car maker BYD has replaced Volkswagen as the official partner for the 2024 UEFA European Championship, marking a significant milestone in the entry of Chinese electric vehicles into the European market.
According to a report by the economic research firm Rhodium Group at the end of April, BYD plans to increase its exports of electric vehicles to Europe by more than seven times within two years, from 16,000 vehicles in 2023 to 130,000 vehicles in 2025. Furthermore, BYD aims to capture 10% of the European electric vehicle market share by 2030, with 920,000 electric cars.
Experts believe that compared to the steep and rapid tariff increases on electric vehicles by the United States (from 25% to 100%), the European Union’s ongoing anti-subsidy investigation against Chinese electric cars that began in October last year is expected to be less severe, potentially avoiding an immediate trade war between Europe and China.
In addition to trade concerns, the connectivity features of Chinese electric vehicles may pose potential national security threats. The competitive advantage of Chinese electric cars lies in their affordability. Professor Yao Yuan from the University of St. Thomas in the US stated that the EU’s investigation is likely to confirm that Chinese electric cars have indeed received subsidies from the Chinese Communist regime.
Yao Yuan analyzed that in the face of such cheap electric vehicles impacting the market, Europe may impose tariffs or quotas following the investigation to restrict the import of Chinese electric cars, rather than fully opening up the market.
Rhodium Group’s analysis further suggests that Chinese electric car manufacturers earn substantial profits from exporting to the EU, with some models, such as BYD’s SEAL U model, making up to 11 times more profit in the EU compared to sales in China.
Therefore, it is suggested that the EU may need to impose tariffs of around “45% or even 55%” on companies like BYD to dissuade Chinese manufacturers from finding the European market unprofitable.
While the US is pushing the EU to confront China, European attitudes towards imposing trade barriers remain hesitant. France and Germany are cautious, with French Finance Minister cautioning against trade wars and his German counterpart emphasizing that trade wars have no winners.
Italy supports the EU aligning with the US on tariff policies, while the UK and Canada are also preparing similar inquiries into Chinese electric cars.
The European Council on Foreign Relations argues that the EU’s lack of trust in China has become a critical turning point in EU-China relations due to the security challenges posed by Chinese electric vehicles, which are more complex and larger in impact compared to 5G networks.
The Council warns that allowing internet-connected Chinese electric cars into Europe could potentially make the continent susceptible to being held hostage by the Chinese government. These cars can be remotely monitored and controlled by Chinese manufacturers, posing risks to national security.
Experts compare the dangers of Chinese electric vehicles to the Huawei situation, with increasing concerns over the threats posed by Chinese electric cars to automotive infrastructure.
Given BYD’s close ties to Beijing through China’s manufacturing strategies, caution is advised against deploying Chinese electric vehicles in sensitive locations in Europe to mitigate potential security risks.
It is essential for the EU and the UK to conduct thorough risk assessments and take prompt actions to protect their economies, industries, and integrity against the influx of low-cost Chinese electric cars, ensuring a regulated market to safeguard consumer rights.
The potential risks associated with Chinese electric vehicles must be addressed promptly, considering the vast amount of data these vehicles collect and transmit, which could pose a new form of surveillance by the Chinese government on EU countries.
As China continues to expand its influence overseas, it is crucial for the EU to find solutions to counter the monopoly and overreliance on Chinese electric vehicles, which are aimed at transferring surplus production capacity and dominating the global electric vehicle industry chain, ultimately curbing the development of other countries.
In conclusion, while China’s motives for selling electric vehicles to Europe may be for economic gain and market dominance, the EU must remain vigilant and implement stringent measures to safeguard its economy, industry, and citizens from potential security risks posed by the proliferation of Chinese electric cars.