Four years ago, only 3% of electric cars sold in Europe were made in China. Last year, that percentage jumped to 21.7%. In other words, one in five electric vehicles arriving on European roads was assembled by the Asian giant. And, of this figure, 7.3% are models from Chinese manufacturers, because the rest are cars from multinationals from other countries, whether from Europe or the United States – such as the giant Tesla – which have decided to manufacture in the Asian giant not only because it is one of the largest markets in the world. Also because their production costs benefited them.
Today, reality is changing and Western automobile industries are starting to shake due to the strength of local manufacturers in this Asian country. On the one hand, because they note that many consumers, when they have to buy an electric car, prefer Chinese cars for the simple reason that they are cheaper. On the other hand, because multinationals do not have the figures and are starting to have financial problems in the face of growing Chinese competition. Just look at what happened with Volkswagen, which plans to close factories in Germany and lay off part of its workforce, which is unprecedented so far and could lead to an earthquake economic and political.
Faced with this situation, the European Commission and the Biden administration have chosen to open the doors to the field and launch a series of tariffs on “made in China” electric cars. They believe they have received state aid which leads to unfair competition. The United States is going further and will ban imports of Chinese software in connected vehicles, because they can facilitate espionage. But who are these manufacturers who are shaking up the foundations of industrial giants with decades of history behind them?
The list of major Chinese manufacturers is long, but some names stand out from the rest and most are better known for their brands, which are starting to gain a foothold in the Western market. Some of them also bought local flags to facilitate their disembarkation. Among all, companies such as BYD, Geely, Chery or SAIC stand out. Furthermore, several of these companies are setting up factories in Europe, sometimes with local partners, which will allow them to escape the pricing policy.
The largest electricity manufacturer above Tesla
Tesla is often cited as the benchmark brand for electric cars. In fact, for the past year, the largest manufacturer in the world has been BYD. For the Chinese company, last year was decisive as its sales and results soared. The former has seen growth of more than 60% worldwide, reaching more than three million cars, although this figure includes not only electric cars, but also plug-in hybrids. This allowed it to double its profit, up to 30 billion yuan, or nearly 3.9 billion euros.
This week, it also became the largest electric car maker by revenue. The Asian giant achieved a turnover of the equivalent of 26 billion euros between June and September, while the company founded by Elon Musk amounted to 23.2 billion euros.
Behind this rise are above all their prices. For example, its best-selling model in Spain is the BYD ATTO 3, an electric urban all-terrain vehicle (SUV) which, if we include the help of Plan Moves, is sold for 26,490 euros. Of this model, 742 units were sold between January and September. There are not many of them and they are far from the 7,187 Tesla Model 3s which dominate the market, but they are 400% more than over the same period of 2023.
The company also has a history of improvement and came from virtually nothing. Its founder, Wang Chuanfu, started a battery company in the 1990s and reportedly had to take out a loan worth the equivalent of $350,000 to do so. A few years later, he saw the opportunity to accelerate his business by betting on affordable electric cars and from there, towards success. Among its shareholders are not only its founder, but also investment giants such as Blackrock or Berkshire Hathaway, the investment arm of Warren Buffett.
Geely and BAIC, links with Renault and Mercedes
One of the Chinese manufacturers with a catalog of well-known brands is Geely. For example, he is the owner of Lynk & Co, which is halfway between a traditional manufacturer and a car-sharing company. Also from Polestar, which is marketed as a premium electric vehicle with Nordic design. And he is a shareholder of one of the most famous Swedish brands, Volvo.
Indeed, Geely has been able to establish a network of alliances with European manufacturers. It is a partner of the French group Renault, not for electric cars, but for thermal and hybrid cars. Together they formed a joint company, called Horse Powertrain, based in London. The Saudi oil company Aramco also participates, with 10% of the capital.
This strategy of sharing agreements also affects high-end manufacturers. Li Shufu, chairman and main shareholder of Geely, also owns 9.7% of Mercedes Benz through the company Tenaciou3 Prospect Investment Limited, based in Hong Kong. A capital of German origin that it shares with the Chinese state company Beijing Automotive Group (BAIC), which holds 10% of the capital of the star’s German company.
SAIC, Volkswagen ally and owner of MG
It is also nothing new that European brands are entering into agreements with Chinese manufacturers. Volkswagen, for example, has been allied with SAIC, the acronym for Shanghai Automotive Industry Corporation, for decades. Together, they have been manufacturing combustion cars in this Asian country for years and, faced with the rise of electric vehicles, they are considering closing some of their factories in this country.
SAIC is behind some of the best-selling brands in Spain, MG. In fact, it claims to be the seventh largest automobile manufacturer in the world. Its most senior official, Wang Xiaoqiu, was one of the leaders met by Prime Minister Pedro Sánchez during his recent official trip to the Asian giant. In the background of this meeting is the decision, still pending, to launch an automobile factory in Europe, again to avoid new tariff demands.
One of its models, the MG MG4, has been among the best sellers in Spain for months. So far this year, it is only surpassed by the Tesla Model 3 and Model Y. A total of 2,022 units of this Chinese car have been registered this year, accounting for more than 5% of all electric cars sold in Spain so far in 2024.
And there are more alliances. Stellantis, owner of brands such as Fiat, Peugeot, Citroën, Opel and Chrysler, controls 20% of the capital of the Chinese company Leapmotor, which allows it to manufacture and sell this brand’s cars outside the Asian country. Among the markets where they are sold is Spain.
Chery will manufacture in the former Nissan factory in Barcelona
Some companies have already reached agreements to produce in the Spanish market. This is the case with Chery. A few months ago, the Catalan group EV Motors, parent company of the Ebro brand, entered into an alliance with this Chinese giant to recover the former Nissan factory in the Barcelona free trade zone.
Initially, the facility will be used to assemble the Ebro models, which were released to the public a few weeks ago to raise funds. In this jump to the trading floor, its president Rafael Ruiz confirmed that Chery cars, those of its Omoda brand, will only begin to be manufactured in the free zone at the end of 2025.
In addition to the previous manufacturers, there are more groups with Chinese capital, such as Nio, Xpeng or Great Wall Motor. And there are brands that a priori have nothing to do with the automobile industry, such as the giants Huawei and Xiaomi, best known for their phones, but which have also launched into the design and marketing of electric cars.
