A former president and CEO of Hyundai Motor UK predicts the European car market will soon be flooded by Chinese electric vehicles following the move by the US to impose a fourfold hike on current tariffs.
Tony Whitehorn, speaking during the Motor Ombudsman and Radius Law Automotive Business & Law Conference held in London on May 15 said: “The only viable direction for expansion is Europe.”
His remarks followed US President Joe Biden’s decision to increase tariffs on electric vehicles from China to 100%, effectively closing off access to one of the largest global markets.
Whitehorn spoke of the significant presence of 91 Chinese car manufacturers (OEMs) in the market, pointing out that, combined, these businesses sold approximately 7 million cars last year and which, today, has a production capacity of 20 million vehicles.
Whitehorn praised the quality of Chinese vehicles, noting their cost-effectiveness and quality through leveraging a decade of experience in electrified vehicle production which has help its manufacturing industry to achieve economies of scale and robust vertical production capabilities.
“The Chinese have a lot of history in terms of producing electrified vehicles. They’ve had 10 years of building up their inventory and building up their expertise on electrified vehicles, and therefore they have a big economies of scale.
“What does that mean? It means that you’ve got an awful lot of EV manufacturers in China. In fact, as at this moment in time, you’ve got 91 electric vehicle manufacturers in China. That’s huge.
“70% of all the gigafactories are based in China. 90% of all the battery technology comes from Asia. So it’s very much oriented towards that part of the globe. The EVs which were sold last year in China was nearly 7 million, that’s 50% of all electric vehicles sold globally.”
“Their manufacturing capacity is 20 million EVs. They therefore need to get rid of these vehicles elsewhere. They definitely can’t go to America after Joe Biden put on 100% tariffs on any EV vehicle coming from China. The area to go is Europe.”
Chinese car makers Chery and SAIC have already established footholds in the UK market while BYD and Great Wall are fast expanding their dealer networks.
Meanwhile, all eyes are on the European Commission which is contemplating applying an extra 10% on existing tariffs on Chinese EVs, should they be deemed to benefit from unfair subsidies. The Commission intends to conclude its probe by November, with provisional duties potentially being imposed as early as July.