The rise of the electric vehicle in China and its impact in the EU

Abstract

Rationale China’s electric vehicle sector has recently aroused considerable interest thanks to its rapid growth and current dominance of the global market. Given the importance of the automotive sector in Spain and the European Union (EU), and the recent introduction of tariffs, it is worth exploring the factors behind this rise. Takeaways •Battery electric vehicle (BEV) market penetration in the EU has grown notably in recent years: in 2023 BEVs accounted for 15% of all vehicles sold (5.4% in Spain), a figure well above the 1.9% recorded in 2019 (0.7% in Spain). •China has secured its status as the world’s leading electric vehicle manufacturer and exporter, its output proving particularly popular in the European market. As a consequence, the market share of BEVs made in China rose from 0.4% of new BEV registrations in 2019 to 20% in 2023. •The success of Chinese BEV exports rests on lower manufacturing costs, thanks largely to China’s control over the supply chain, government support policies at various stages of production and the country’s early embrace of electric vehicles.