The European Union, the US, and Canada have all announced plans to limit Chinese-made electric vehicles (EVs) over concerns that subsidies provided by the Chinese government are unfair and detrimental to local car makers.
Despite global restrictions on Chinese electric vehicle (EV) exports, major Chinese EV manufacturers, including BYD, Li Auto, Nio, and XPeng, reported a surge in year-on-year sales for August.
Tesla also announced a significant increase in its EV sales last month, including vehicles sold within China and those exported from China to overseas markets. This growth indicates a rebound in global demand for EVs, suggesting that Chinese EV makers may be able to withstand regulatory challenges posed by new tariffs imposed by the US, the EU, and Canada this year.
Surge in August delivery number
BYD, the best-selling Chinese electric vehicle (EV) brand, achieved a record monthly number of passenger vehicle sales, with new energy vehicles surging 30% year-on-year to 373,083 units.
According to its report, deliveries of plug-in hybrid EVs rose by 48%, while sales of battery electric vehicles increased by just 12%.
Overseas sales of New Energy Passenger Vehicles (NEPV) amounted to 31,451 units, representing 8% of BYD’s total NEPV sales.
BYD’s overseas sales reached 270,000 units in the first seven months, accounting for 14% of total sales, putting the company on track to meet its target of 500,000 exports this year.
Aside from BYD, Li Auto performed best among Chinese EV manufacturers, with sales up 37.8% year-on-year to 48,122 vehicles in August, despite a 5.6% slowdown from July.
Additionally, XPeng delivered 14,036 EVs during the same month, up 2.5% from the previous year and a 26% surge from the prior month. High-end EV maker Nio sold 20,176 electric cars last month, marking a 4% year-on-year increase.
Notably, Tesla’s China-made vehicles also saw a 3% year-on-year sales growth in August, according to the China Passenger Car Association (CPCA), with deliveries of the Model 3 and Model Y rising by 17% from July.
The rise in sales includes car deliveries within China and exports to Europe and other countries, indicating that the world’s largest EV maker continued to benefit from China’s policy incentives.
Global curbs on Chinese-made EV exports
The European Union, the US, and Canada have all announced plans to limit Chinese-made electric vehicles (EVs) over concerns that subsidies provided by the Chinese government are unfair and detrimental to their local car manufacturers.
Both the US and Canada have proposed 100% tariffs on Chinese-made EV imports, while the EU plans to impose a much lower rate compared to its counterparts.
Two weeks ago, the EU reduced an additional tariff on Tesla EVs made in China to 9%, down from the previously planned 20.8%.
This new rate is significantly lower than the range of 17% to 36.3% imposed on other Chinese EV manufacturers.
The EU has also revised duties on other Chinese carmakers, setting them at 36.3% for SAIC, 19.3% for Geely, and 17% for BYD – all slightly lower than the previous proposals.
The plan is subject a majority of the 27 EU member states’ approval before 31 October. If approved, the new tariffs will remain in effect for the next five years.
China’s EV exports decline may be temporary
According to Dataforce, registrations for China-made electric vehicles (EVs) across Europe fell by 9.7% year-on-year in July.
It is believed that this decline is linked to the EU’s provisional additional tariffs on China-made EVs. However, the decrease was significantly less severe than the 30% drop in June, suggesting that the impact of these new tariffs may be temporary.
In response, Chinese car manufacturers are preparing to establish production plants overseas to counter the additional tariffs being imposed by other countries, which will likely boost their sales volume in the long term.
Long-term investment to fuel expansion
BYD is investing billions of dollars to expand its manufacturing facilities into Europe, Asia, and South America, with locations including Hungary, Brazil, and Turkey.
The company has stated that its overseas markets will account for a significant proportion of global sales in the future.
However, it has paused plans to invest in a Mexican plant due to the upcoming US elections.
SAIC has already built three car factories in Thailand, Indonesia, and India. Chery Auto signed an agreement with Spain’s EV Motors to build its first European factory in Catalonia.
The company also indicated last year that it would establish a factory in Argentina and is considering building a new plant in the UK.
