Europe or bust? A wary EU braces for a wave of made-in-China electric cars

More than 3 million cars rolled through here last year – but it is the surging number of Chinese-made electric models that has caught the eye of bureaucrats 90 miles down the road in Brussels.

Last week, the European Union’s trade department launched an investigation into subsidies in China’s EV sector, claiming to have already found ample evidence of market-bending state support.


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If the claims are proven, the suspect vehicles will be slapped with import duties – action that Beijing has already warned it will not take lying down.

The Ministry of Commerce lashed out at Brussels’ decision to “conduct consultations [over the probe] within a very short period of time”.

Senior EU sources said there was a formal bilateral meeting last week about the investigation, but admitted that the timing – during China’s “golden week” holiday – was not ideal. Nonetheless, shrugged one, Brussels often deals with China-related issues over Christmas, and there will be plenty of chances to talk during the investigation.

If there is an EU-China trade war over electric cars, then Zeebrugge Port may well be the front line.

China’s shipments of electric vehicles to the EU shot to US$9.2 billion, up 86 per cent, in the first eight months of 2023 compared to a year earlier, Chinese customs data show. The boom has come from a virtual standstill – since the same period in 2018, exports rose an eye-watering 123,219 per cent, from just US$7.2 million.

And for the last few years, Belgium has been the No 1 destination.

This year, 19 per cent of all China’s global EV exports have landed in a country with a population around half that of Beijing. Most of them have docked at Zeebrugge, a port attached to a village of 1,850 people. From here, they are loaded onto trains, trucks and other boats, before fanning out across Europe.

“It is going up dramatically and so now our biggest import port is Shanghai,” said Marc Adriansens, managing director of International Car Operators (ICO), which runs the biggest roll-on/roll-off (ro-ro) terminal at Zeebrugge.

“Before there were many Japanese ports, but now it has shifted to the Chinese, mainly Shanghai. Last year over 200,000 cars were imported from Shanghai, about 10 per cent of our total volume and maybe 20 per cent of our total imports are now coming from China.”

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Adriansens oversees operations from an office with a panoramic view of a port bursting at the seams. In row after row, 75,000 cars stretch out to meet the horizon, all waiting to be picked up. A shortage of lorries – a hangover from the pandemic – has been compounded by a shortage of drivers, with many Ukrainian truckers returning home to fight the Russian invasion.

“Of course, one of the big ones is Tesla. Is this Chinese or not? But anyhow, it’s produced in China. I think half of this [volume] is coming from Tesla,” Adriansens said, estimating that one in 10 of those sitting in the yard were Chinese-owned brands such as MG or Geely.

But brand ownership is irrelevant to the EU’s investigation – all electric vehicles made in China are subject to scrutiny, including Europe’s own carmakers.

Top officials have publicly confirmed that Tesla is in its cross hairs, with media reports that the US giant received Chinese bank loans on favourable terms, and tax breaks from the Shanghai government for its Gigafactory there.

EU officials admit privately they are willing to go after European companies too, in a bid to save jobs in Europe and level the playing field for those that are not getting help from the Chinese government.

“We can’t compete with China on subsidies, even if we wanted to,” said one official, adding that those companies receiving state aid had made their beds and now must lie on them.


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For now, Chinese EV brands account for just 3.7 per cent of the EU market, according to the European Automobile Manufacturers’ Association. But that share is rising fast, raising fears among some policymakers about the road ahead.

“It is more of a wave that is coming in the future,” said Pepijn de Vreese, the port manager responsible for the ro-ro facilities.

“If we look at the market today, they have a good product against a competitive price. But that depends also on the geopolitics … if there are trade barriers, then it could change again.”

These brands know this too and are keen to get rolling. Many have already been forced to look abroad due to saturation in the domestic market, and now find their overseas options narrowing quickly.

“What’s not getting a lot of attention is the fact that the Chinese market for the past six years is not a growth market,” said Bill Russo, CEO of Automobility Ltd, a Shanghai consulting firm.

“EVs are a growth segment but the overall market has been negative. Peak year in automotive sales in China was 2017. So we’ve had a fairly significant decline … there’s an overcapacity situation.”

Trump-era, 27.5 per cent tariffs mean Chinese EVs are effectively shut out of the American market. Indian tariffs on cars valued under US$40,000 run to 70 per cent, while in Turkey all Chinese EVs come with a 50 per cent levy, according to the trade policy newsletter Most Favoured Nation.

Trade wonks estimate that an EU investigation could lead to an additional 10 per cent duty, taking the total tariff to 20 per cent and making it more difficult for the carmakers to get a foothold in the market.

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“Europe is the last open market,” Brad Setser, a senior fellow at the Council on Foreign Relations, said in a panel discussion last week.

“The Europeans are struggling to figure out how to reconcile their commitment to their WTO principles and the reality that they’re putting themselves at a disadvantage relative to both the US … and China, which never allowed imported vehicles to qualify for its own EV subsidies.”

Back in Zeebrugge, Leander Desmedt has run the Car Centre for almost 30 years. He used to exclusively service Fords, adding optional extras such as on-board cameras, fixing dents incurred in transit, and ensuring a showroom polish.

But in recent years, he has seen more Chinese brands stream through. In his yard, he shows the full range of BYDs, with the Han at the top end up to rival Tesla, he says.

“They just want to conquer the market,” he said, commenting on the relentless drive of Chinese makers. “It’s all about price and ‘now now now’. And then I think they are sometimes making strange decisions.”

Andriansens said the manufacturers were “aggressively” targeting the market. “The plans are huge. So if they talk about 20,000 car imports this year, they say next year 200,000.”


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In a sign of that ambition, Cosco, the state-owned shipping conglomerate, has 24 giant ro-ro vessels on order for delivery next year, each of which will transport more than 7,000 cars.

Things are already moving faster – BYD started shipping to Rotterdam after failing to agree an immediate berth with ICO at Zeebrugge, then transiting cars the 117 miles back to Belgium for service and distribution. Other brands are shipping in containers – an unorthodox but not unknown way to transport cars – due to capacity issues on ro-ro ships.

“Get in straightaway, that’s in their decision making. They are very nervous,” Desmedt said.

But there is little sympathy in the industry for the EU investigation, where most view it as a fait accompli. In Shanghai, Russo blamed the complacent European car industry.

“If you don’t have affordable EVs to compete with China, is that China’s fault, or is that because your companies didn’t prioritise EVs?” he said.

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“There is no road to the future of electric mobility that does not travel through China … that’s what the world needs to wake up to.”

In his office overlooking the harbour, Adriansens appeared resigned when asked if tariffs were inevitable. “Could be,” he said, admitting that it “will have an impact” on business.

“If you hear that von der Leyen is already announcing this, that maybe they have to do something on the import duties … could be.”


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