The European automotive market has seen a rapid expansion of Chinese electric vehicles (EVs) over the last decade. This trend has created a serious challenge for local car manufacturers and politicians. According to February 2025 data, Chinese EVs hold 6.9% of the European market, and some experts predict this figure could exceed 15% by the end of 2025. This rapid growth is fundamentally changing the competitive landscape.
Europe's Dilemma: Competition and Protection
The main concern for European countries is that the low prices of Chinese EVs are not solely a result of efficient production and economies of scale. There are suspicions that the Chinese government significantly subsidizes its car manufacturers, giving them an unfair advantage in the global market. According to marketing theory, this can distort normal competition mechanisms and introduce "unfair play" rules into the market.
In September 2023, the European Commission officially launched an anti-dumping investigation into EVs imported from China. The goal of this investigation is to determine if Chinese EVs receive state subsidies that distort competition in the European market. If the investigation confirms dumping, the European Union will be authorized to impose retaliatory tariffs, meaning additional customs duties on Chinese EV imports. This step will allow Europe to protect its domestic manufacturers and save jobs.
Historical Parallels: The Japanese Experience
The current situation with Chinese EVs in Europe somewhat resembles events from the 1970s and 1980s, when Japanese car manufacturers began a massive expansion into the American and European markets. Japanese cars were known for their fuel efficiency, reliability, and relatively low prices, which made them attractive to American and European consumers, especially during the oil crisis.
At that time, American and European car manufacturers faced serious challenges. Local manufacturers accused Japan of dumping. Eventually, some countries, including the USA, imposed Voluntary Export Restraints (VERs) on Japanese automotive brands to protect their domestic market. This historical experience shows that rapid and large-scale foreign expansion often leads to trade tensions and protectionist measures.
Impact on the Global Auto Industry
Overall, the expansion of Chinese EVs makes the global auto industry more competitive. The increase in competitive pressure, according to Kotler's theories, often forces established market players (in this case, European and American car manufacturers) to accelerate innovation, electrification, reduce costs, and improve product quality. This competitive struggle, in the long run, means a wider choice for consumers and could increase the availability of more affordable and innovative electric vehicles.
However, the final impact of this trend on the global economy and industry will undoubtedly be significant. Europe's response to this challenge, including the introduction of customs barriers, will be crucial not only for the future of the European auto industry but also for global trade relations. History shows that such trade tensions are rarely resolved easily and often require complex diplomatic and economic solutions. How these trends will affect global supply chains and the pace of innovation remains to be seen in the near future.
