On May 28, Long Wall Motor’s German subsidiary announced the closure of its European headquarters in Munich, Germany. All employment contracts will be terminated by August 31, and expansion plans are being put on hold. Long Wall Motor becomes the first among Chinese new energy vehicle companies to shut down its European headquarters.
According to reports from “Financial World,” the European operations of Long Wall Motor will be transferred to domestic departments. Currently, 100 employees have received notices of dismissal, including the head of Long Wall Motor’s European operations, Steffen Cost.
Long Wall Motor stated that the closure of the European headquarters is related to the slowdown in the European electric vehicle market, especially in Germany. They mentioned that they will relocate Long Wall Motor’s European parts warehouse from Nuremberg, Germany to Amsterdam, Netherlands.
German magazine Manager Magazin cited internal sources revealing that on May 28, Long Wall Motor informed employees and business partners of this decision. The European business of Long Wall Motor will now be managed by the Chinese headquarters. The previously planned entry into new European markets is no longer on the agenda, at least for the time being.
In 2021, Long Wall Motor officially established its European headquarters in Munich, Germany, as the center for expanding into the European continent market. In 2022, Long Wall Motor partnered with the largest automotive dealer group in Europe, Emil Frey, to help distribute its Ora and Wey brand vehicles.
However, Long Wall Motor failed to achieve its expansion goals in Europe. Up to now, the company has only reported 6,300 new registrations in 2023.
According to European market research firm Dataforce, Long Wall Motor’s sales in the European market for the first four months of this year were 1,621 vehicles, with a year-on-year increase of 147%. All vehicles sold were Ora 03, also known as Funky Cat, but the overall scale in the European market remains relatively small.
Last year, Long Wall Motor sold over 300,000 vehicles in overseas markets, aiming to reach 500,000 in sales this year. The cooperation between Long Wall Motor and its German partner, Emil Frey Group, will continue according to Manager Magazin.
Initially, Long Wall Motor’s Chinese management could not reach an agreement with Emil Frey Group on the sales model, leading to a complete change in brand strategy by Long Wall Motor. The newly established vehicle model names, such as the compact electric car Ora Funky Cat and Wey Coffee 01, were both discontinued.
Instead, Long Wall Motor (Great Wall Motors) becomes the main brand in Europe, renaming models to GWM Ora 03 or GWM Wey 05, which Emil Frey Group was not satisfied with.
Furthermore, the EU’s anti-subsidy investigation into Chinese electric vehicles may lead to additional tariffs, creating a high level of uncertainty for Long Wall Motor.
The EU originally planned to announce temporary tariffs on Chinese electric vehicles on June 5, with an “astonishing” increase compared to existing tariff levels. This would significantly raise the costs of selling Chinese electric vehicles in Europe.
Reuters reported on May 29 that the EU Commission’s decision on taxing Chinese electric vehicles would be postponed until after the European Parliament elections on June 9. The new date for announcing the temporary tariff increase is set for June 10 due to technical document issues.
Against the backdrop of the Chinese government providing hefty subsidies to electric vehicles to artificially lower prices, harming European manufacturers’ interests, the EU initiated an anti-subsidy investigation into Chinese electric vehicles in October last year.
Due to the involvement of multiple companies, the EU Commission selected Byton, SAIC Group, and Geely as the target companies for the investigation.
The legal deadline for the EU to implement temporary measures such as tariffs or quota restrictions on Chinese electric vehicle exports to Europe is July 4, nine months after the start of the EU Commission’s anti-subsidy investigation.