The best-selling budget electric car in China sells for about $5,000. A fall in prices to such affordable levels helped almost double China’s passenger electric vehicle sales last year. At 5.9mn units, sales more than twice outstripped the combined total for Europe and the US.
At the same time, the industry is struggling with overcapacity created by aggressive investment in the last decade. Geopolitical tensions and government policies spawned by them make the US market complicated to enter. As a result, Europe has become the key target for Chinese EV makers searching for new markets. That brings fresh urgency to European automakers’ efforts to catch up.
Nearly half the cars exported from China are now sold in Europe. The figure rose about 60 per cent last year. Around two-thirds were battery electric cars. The historical parallel is with the push into the US by Japanese car makers in the 1970s — which offers a hint of what may come in Europe.