Bad news for Li Auto, Nio, BYD, and Zeekr: Is Chinese EV domination of Europe about to stall?

In the past three years, an interesting market takeover has been occurring: that of Chinese or Chinese-manufactured electric vehicles dominating Europe’s EV car sales.

According to recent research by Europe’s Transport & Environment (T&E) one in four of all EVs sold in Europe in 2024 will be made in China.

Latest Transport & Environment (T&E) data

As T&E states in a website article on the subject:

T&E also added a prediction:

It’s set to potentially be an all-out trade war in the car space for Europe’s garages – and, so far, China is winning.

The NIO effect

Take Nio for example. Back, in 2021, Chinese EV car marker Nio made a promise on the eve of its expansion into Norway for the first time:

"A new premium brand is joining the EV market in Europe. NIO will come to stay,” said Hui Zhang, Vice President of NIO-Europe.

Almost exactly three years later, Zhang seems to have been proven right. Nio CEO and co-founder William Li, at the opening ceremony of the new NIO House in Amsterdam, gave the following progress report:

Since 2021, NIO has made substantial progress in its European operations. As of May 23, 2024, six mass-produced models—ES8, ET7, EL7 (ES7 in China), ET5, ET5T, and EL6 (ES6 in China)—have entered the European market. NIO has established 43 battery swap stations, 46 charging stations, and connected over 500,000 third-party chargers in Europe. NIO has built seven NIO Houses, eight NIO Spaces, and 55 NIO Service Centers in Europe… with 186 European User Advisory Board members participating in building the NIO brand, growing together with NIO, and representing the company's full-scale entry into the European market

Is the bull run over?

But new research seems to evidence that this bull run of growth for Chinese EV makers in Europe may be running out of steam.

Schmidt Automotive Research, which publishes a respected monthly report called The European Electric Car Study, said recently that:

Automotive data analysis firm JATO Dynamics had a similar diagnosis on May 30^th, when it stated that demand for EVs and Chinese-made cars in particular noticeably slowed in April 2024 in Europe, despite registrations for the overall passenger car market being up by 13%.

Why are Chinese EV sales slowing in Europe?

The most likely reason? A distinct cooling in European sentiment for encouraging Chinese manufacture of cars. In France, for example, the first quarter of the year saw the country doing away with a previous electric vehicle purchase subsidy for EVs of Chinese origin, while keeping the subsidy for European makes.

The European Union’s current and ongoing anti-subsidy investigation into the imports of battery electric vehicles (BEV) from China, which is set to report its findings sometime later in June, is another example.

An alternate view

However, it may be important to remember that Chinese EV makers still have quite a long way to fall.

In a separate recent article, Schmidt also said recently that one out of every three ‘pure electric’ passenger vehicles currently available in Europe has been made in China.

Either way, many investors will be watching the EU's subsidy decision closely later on this month.