Mercedes And Other German Automakers Disagree With France’s Call To Limit Chinese EVs
Giancarlo Perlas June 29, 2023In the race to dominate the European electric car market, France and Germany find themselves at odds over China’s aggressive push to sell over a million electric vehicles (EVs) in Europe by 2030. The European Union (EU) perceives this as a significant threat to its own electric car manufacturers, sparking a heated debate among member states. The implications of China’s early entry into the market, coupled with its technological edge and competitive pricing, have ignited concerns about the future of Europe’s automotive industry.
French Automakers Threatened by Influx of Chinese EVs in EU
While France’s President, Emmanuel Macron, has been persistently advocating for EU partners to safeguard the interests of Europe’s electric car manufacturers, the German industry has maintained a skeptical stance on the matter. The crux of the disagreement lies in the potential consequences of taking action against China according to a report from Forbes.
France, with limited exposure to the Chinese market, perceives it as a grave threat and calls for decisive measures. On the other hand, German manufacturers, such as Mercedes-Benz, Volkswagen, and BMW, fear that curbing China in Europe could jeopardize their profitable operations in China.
German Automakers Against France’s Stance to Limit Chinese EVs in the EU Market
The imminent flood of Chinese EVs into Europe has sounded alarm bells, prompting discussions about safeguarding the European electric car industry. Internal Market Commissioner Thierry Breton of France has expressed support for investigating the dumping of Chinese electric cars, although details about the probe are yet to be disclosed. Concerns have also been raised about the impact of Chinese battery electric vehicles (BEVs) on European automakers’ profits, with estimates suggesting potential losses of billions of euros annually by 2030 if the EU fails to take action.
However, navigating this issue is complex. Investment bank Morgan Stanley notes that German and French interests are in conflict, with German manufacturers heavily dependent on the Chinese domestic market, while French manufacturers face the threat of cheap Chinese BEVs in Europe. The report also suggests that Chinese manufacturers may eventually establish factories in Europe, further intensifying the competition.
Experts and analysts are divided on how to approach the situation. Some hope that negotiations with China could lead to a middle-ground solution, potentially involving the establishment of Chinese factories in Europe. On the other hand, Professor Ferdinand Dudenhoeffer from Germany’s Center for Automotive Research warns against protectionist measures, citing historical examples where such actions have weakened industries in the long run.
Final Thoughts
As the debate unfolds, Europe’s automotive industry must carefully consider the potential consequences of both action and inaction. The clash of interests between France and Germany reflects the complex dynamics at play, with significant economic stakes for European manufacturers and the wider market.
