To make the China to enter international markets has supported too many Chinese companies in recent years car in order to grow. But they are well aware in China that they will only survive a few. The penetration of Chinese companies in Europe has changed market balances and has reduced the prices of several models. Certainly this is good for consumers, but not for European automakers, as reports report by the used car analysis company, Indicata.
In order for a Chinese manufacturer to be profitable, it must produce at least about one million vehicles a year. Although the Chinese car market is expected to increase to over 33 million vehicles by the end of 2025, only a few companies will be able to survive. Most, despite the generous efforts, can be out of competition.
Byd has recently announced price reductions in 25 models, prompting reaction to the entire car industry, which has significantly reduced vehicle profit margins. According to Indicata, Chinese manufacturers have reduced prices by up to 34%, and we should not overlook the discounts they make on some models. All this, when in the first four months of 2025, 33% of China’s total electric vehicles were intended for export, while the ultimate export target is to reach 50%.
China will turn to parts of the world that have not yet adopted electric drive. Today there are mature electric vehicles such as Brazil and Mexico or smaller such as Australia, which can have high sales rates. Much more interesting is the European Union. Although it has imposed its own duties, Chinese companies have the same profit margin to continue their expansionist policy.
“Europe is the most viable and profitable export destination for Chinese electric vehicles. Despite EU duties, Chinese manufacturers can still sell electric vehicles in Europe in a more profitable way than in their domestic market, “said World Business Manager at Indicata, Andy Shields.
As a result, the share of Chinese electric vehicles in the EU market has increased from 1% in 2019 to 11% in 2024. In the United Kingdom the corresponding share went from 2% to 18% during the same period. This trend is likely to continue in the future, with significant impact on both new and used car markets throughout Europe.
Source: Skai
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