China’s oversupply of electric vehicles and the global overflow of low-priced products have been discussed at the “2024 China Automotive Chongqing Forum” held on June 7. Li Shufu, Chairman of Geely Auto, mentioned that the continuous internal competition in China’s automotive industry has led to price wars resulting in corner-cutting, fraudulent sales, and irregular competition.
During the forum, Li Shufu criticized the internal competition issue in China’s automotive industry as a global concern, with price wars escalating. He highlighted that this unending spiral of internal competition and aggressive price wars have led to corner-cutting, counterfeit sales, and irregular competition detrimental to the industry’s healthy development.
According to reports, Cui Dongshu, Secretary-General of the Joint Market Information Department of the China Passenger Car Association, stated that the price wars in 2024 have been intense, with passenger cars witnessing significant price reductions within the first five months of the year, surpassing the total scale of 2023 by 90% and 2022. Most impacted are new energy vehicles such as pure electric and hybrid electric vehicles, leading to widespread losses in Chinese new energy vehicle sales, with only a few enterprises managing to remain profitable.
Moreover, Chinese electric vehicles are facing sales challenges in overseas markets. Deng Xiaodan, General Manager of Lynk & Co’s overseas business department under Geely, disclosed that during his visit to Europe in May, he observed a substantial accumulation of Chinese electric vehicles at major European ports, possibly due to trade protection measures implemented by European and American countries increasing the export risks for Chinese electric vehicles.
Deng Xiaodan cautioned automotive companies to strategize carefully, warning of potential scenarios where profits earned in previous years could be lost in subsequent years.
On May 14, the United States announced imposing a 100% tariff on Chinese electric vehicles. The European Union is also conducting anti-subsidy investigations on Chinese electric vehicles, potentially leading to additional tax measures.
Simultaneously, the growth rate of the European electric vehicle market has slowed down, raising concerns about whether electric vehicles are experiencing stagnation.
According to a report on Caixin Net on June 8, on June 7, data released by South Korea’s SNE Research revealed that from January to April 2024, a total of 881,000 pure electric and plug-in hybrid cars were sold in Europe, showing an 8.6% year-on-year growth. However, this figure accounted for 22.4% of the global automotive market, a decrease of 2.4 percentage points compared to the previous year. SNE noted that the cancellation of electric vehicle subsidies in major European countries has significantly slowed down the growth rate of pure electric vehicles in Europe.
In April, Automotive News Europe reported that thousands of imported cars were stockpiled at several European ports, with many of them originating from China. Manufacturers rented large areas at ports to park these vehicles. The report mentioned that the premature end of electric vehicle subsidies in Germany suppressed market demand. Germany is the largest new energy vehicle market in Europe.
The European ports and logistics system are struggling to cope with the influx of imported vehicles. Automotive News reported that the vehicle backlog has been ongoing for some time, with inadequate trucks available to transport these electric vehicles.