The Chinese EV market is currently under intense scrutiny, exemplified by the EU Commission's recent investigation into subsidized electric cars from China. This inquiry challenges conventional notions of dumping, as Chinese EVs in Europe are priced twice as high as in their home market, while European EVs in China cost half as much as in Europe. This raises the question: who is truly dumping?
Three key factors contribute to the competitiveness of Chinese EVs: China's control over the battery supply chain, the highly competitive domestic market fostering efficiency among automakers, and economies of scale, driven by China's position as the world's largest new energy vehicle market.
With 77 automakers offering 129 brands and a staggering 820 vehicle models, the Chinese EV market dwarfs its European and US counterparts. Among these, 210 are battery electric vehicles (BEVs), showcasing the market's diversity and fierce competition. Notably, internal combustion engine (ICE) models are declining, from 570 in 2019 to 398, as foreign brands like Ford, Renault, and Mitsubishi exit.
Despite challenges, such as limited home charging options for Chinese EV owners, the market continues its exponential growth. Even the termination of government subsidies has failed to deter buyers, with foreign investments pouring in, signaling confidence in the Chinese EV sector.
Speculating on the EU Commission investigation's outcome, geopolitical factors might influence a conclusion unfavorable to Chinese businesses, akin to the trade restrictions seen in the US. This investigation adds another layer to the evolving dynamics of the global EV market, with potential implications for trade relations and industry competitiveness.