The Chinese brand BYD is set to launch an electric car priced under 20,000 euros in the European market next year. This move has sparked concern among local manufacturers who fear losing market share to the new competitor. BYD’s entry into the European market has been met with skepticism and concern by some of the established players in the industry.
In response to this threat, President Joe Biden has increased import duties on Chinese electric cars in the United States. This move is aimed at protecting American manufacturers from potential domination by Chinese brands like BYD without trade barriers in place. However, this protectionist measure may not be enough to stop BYD from establishing a foothold in the European market.
The European Commission is also investigating the Chinese electric car industry for possible illegal government subsidies. This investigation may lead to a rise in import duties on Chinese electric cars entering the European market, which could further disadvantage local manufacturers. However, European manufacturers like BMW, Volkswagen, and Stellantis have expressed opposition to such protectionist measures. They believe that long-term competitiveness should be achieved through innovation and market competition.
European car makers are heavily reliant on the Chinese market for their survival, especially those based in Germany. This dependence makes them vulnerable to potential retaliation from China if they try to impose protectionist measures on imports from China. Recent reports suggest that China is considering imposing import duties on American and European cars as a response to trade disputes with these countries.
To mitigate this impact of increased import tariffs, BYD has announced plans to establish a production site in Hungary and open a second factory by 2025. These moves could help BYD expand its production capacity and access new markets while also reducing its dependence on any one country or region.
Overall, BYD’s entry into the European market presents both challenges and opportunities for local manufacturers and consumers alike. While it may cause some short-term disruptions, it will ultimately drive innovation and competition in the electric car industry across Europe and beyond.
