China takes the lead in the electric vehicle competition?

Electric vehicles are dominating China's domestic car market, surpassing sales of conventional models. However, Western nations appear firm in their efforts to prevent these electric vehicles from passing their borders. The reason behind this stands questioned.

, and Administrator

2025 September 13 . 6:50 PM

2 min read

China takes the lead in the electric vehicle competition?

The European Union (EU) has recently imposed tariffs on Chinese electric vehicles (EVs), a move that could have significant implications for the global EV market. Here's a breakdown of the key points surrounding this news:

The EU has set import tariffs on Chinese EVs of up to 15%, which is the maximum rate under its common external tariff for passenger cars from non-EU countries. This decision affects a wide range of manufacturers, with the biggest exporters, including BYD, the world's largest EV maker, facing additional tariffs of 17%-20%. Companies deemed not to have cooperated, such as Shanghai-based SAIC, will pay 38%.

China, the world's biggest market for EVs, accounting for three-fifths of all units sold this year, is set to be impacted by these tariffs. In July 2022, retail sales of electric vehicles (EVs) and hybrids in China surpassed those of internal combustion engine cars for the first time, making up 51.1% of all sales. According to the International Energy Agency, 10.1 million EVs (including hybrids) will be sold in China this year, compared to 3.4 million in Europe and 1.7 million in the US.

The boom in the EV market in China is due to years of government subsidies and tax breaks for both producers and consumers, as well as major strategic investment in the development of technology and infrastructure. The Chinese government's investment in the EV market was more of a geopolitical move to dominate a high-end, high-status industry.

Chinese EV exports to Europe surged from 4% in 2020 to 25% by September 2023, making China's EV exports to Europe last year worth about €10 billion. European brands such as Mercedes and Renault, which export EVs made in China, will pay 21%.

Beijing has lodged complaints with the World Trade Organisation regarding the EU's tariffs on Chinese EVs. The EU's action against Chinese green tech imports is opposed by Germany, with fears of a costly trade war with China. The Financial Times argues that the EU's action may hinder decarbonisation efforts and that it would be better for everyone if protectionism had to give.

The charges came into effect last month, but are currently provisional while the investigation into Chinese state support for the country's EV makers continues. The International Energy Agency forecasts that global EV sales will grow to 20 million in 2025 and then double to 40 million by 2030, accounting for 30% of all car sales by that point.

In the US, the share of electric and hybrid vehicle sales in the first quarter of 2022 was 18%. Sales of "new-energy" cars in China in July 2022 were 37% higher year on year, while sales of conventional cars fell 26%. Marketing of EVs in China rarely emphasises the environmental benefits, instead focusing on cost and the range of available products.

As the EV market continues to grow and evolve, it will be interesting to see how these developments unfold. The EU's decision to impose tariffs on Chinese EVs is a significant step, and its impact on the global EV market remains to be seen.