China is pushing thousands of electric cars into the market – now parked in German ports

Chinese automakers arrived in Europe with high expectations. After a very early jump like Landwind, Brilliance or Borgward, e-mobility is now enabling the Chinese to make a big attack in Germany. Because here China is at the forefront of the world. And the EU’s eco-friendly economic policy with the ban on combustion engines as well as many subsidies and tax breaks for e-mobility is playing into the hands of the Chinese.

Chinese cars have flat tires at the port

But apparently that is not enough. The registration numbers of Chinese car manufacturers in Germany are very poor, as current data from the Federal Motor Transport Authority (KBA) for the first quarter of 2024 shows:

• score The way According to official statistics, there was only one (!) car registered from January to March.
• BYD (Build Your Dreams) , the electric giant with the real power of Tesla hunters, achieves an insane increase of 514 percent year-over-year. But that is saying little. The absolute numbers show that the hype surrounding BYD, at least for now, is unfounded: less than 400 cars were registered in the first quarter.
• Also Great Wall Cars , Lynk & Co. , Yes or Polestar play only minor roles in the market.
• The only exception is MG : Electric and hybrid SUVs from the MG Roewe Group, which has been active in Europe for many years, were registered almost 4,500 times in the first quarter of 2024, an increase of 16 percent.

“More cars than 2021 and 2022”

There is still no sign of the wave that is now overwhelming German, Korean, French or Japanese carmakers in Germany. Instead, a completely different picture prevails. Thousands of new cars are blocking European ports as reported by “Automobilwoche”, among others . In addition to the lack of truck drivers for continued transportation, another reason is obvious and not disputed by local people: There are many imported but not sold vehicles from China that are now temporarily parked at the port. “This situation is currently affecting all European ports where a large number of vehicles arrive,” said Gert Ickx, spokesman for the Belgian port authorities of Antwerp and Zeebrugge. The port administration did not provide exact figures, but the port is currently occupied by more cars than in 2020 and 2021, writes “Automobilwoche”. The early end of the electricity purchase bonus also contributed to this. “That’s why electric cars stay at the port for a long time. This affects imported electric cars of all products,” said “Automobilwoche”, citing a logistics expert.

Be careful with electric vehicles after standing for a long time

According to various media reports, some of these vehicles are parked for 18 months before being transported further. This will be a problem especially for electric vehicles, because if the battery is not charged, it can be damaged and lose part of its capacity during this time, depending on the initial conditions and the outside temperature.

But what does the current stability in the German and European electric market at large mean for the growth of Chinese manufacturers as car sellers outside their subsidized luxury home market? Finally, the ban on combustion engines in 2035 is approaching. Many car manufacturers such as Opel or VW will soon offer all petrol, diesel and hybrid models from their range and the sales market for electric cars is likely to increase significantly in the medium term.

3.6 billion to BYD – how Chinese automakers are financed by the dictatorship in Beijing

More than a recovery for VW, Renault, Hyundai and Co. cannot be the current situation if you look at the growth plans of Chinese car manufacturers. In a recent analysis, the Kiel Institute for the World Economy (IfW) listed the huge amount of money that the dictatorship in Beijing spends on the expansion of its car manufacturers:

• Between 2018 and 2022, BYD, China’s largest electric car manufacturer and fierce competitor of Tesla, VW and Co., not only on the Chinese market, received the equivalent of 3.4 billion euros in direct government support alone. . “This shows BYD’s rapidly expanding technology and production capacity and increased competitiveness,” said ifW.
• “In terms of sales, this corresponds to an increase in direct subsidies from 1.1 percent in 2020 to 3.5 percent in 2022. BYD also receives more bonuses for the purchase of electric vehicles in China than all other domestic manufacturers such as GAC or foreign companies that produce locally, such as Tesla or the VW joint venture,” says Dirk Dohse, director of research at IfW Kiel.

Access to raw materials and shortened procurement procedures

This is not just direct support in the form of subsidies or purchase bonuses. While the EU has placed a heavy bureaucratic burden on companies with the new supply chain law, the exact opposite is happening in China: “With other support measures, such as preferential access to key raw materials, technology transfers are sometimes carried out against investors. foreign and preferential in public procurement and administrative procedures, Chinese companies were able to expand very quickly in many areas of green technology, dominate the Chinese market and increasingly penetrate EU markets,” the IfW study continues.

It is surprising to note that even in China, which is very fond of electric cars, new battery models are apparently not available to women or men in the quantities needed without subsidies. A few years ago, China wanted to reduce transaction fees because it was assumed that e-mobility would no longer be necessary.

China continues to put pressure on electric vehicles, hybrids and combustion engines

It seems that it is not the case – and the current Chinese operating strategy, in addition to expanding battery power, also includes research and development in the area of ​​renewable energy such as e-fuels, methanol or biofuels. The Chinese automaker will not only undercut VW and Co when it comes to electric cars, but also when it comes to combustion engines; especially for plug-in hybrids, which, unlike Germany, are still recording a significant increase in new registrations in China. The European Union Commission has now identified a supposed lifeline for European electric car manufacturers: it has launched a competition investigation into state aid for electric car manufacturers in China. Such competition investigations could, for example, lead to punitive tariffs on imported cars.

Protective tariffs as a last resort? The stakes for the EU are high

However, this will jeopardize German manufacturers and their participation in China, warned several experts in response to this announcement. Jochen Siebert from JPW Asia agrees: “If China were to impose tariffs or similar measures, it would greatly affect German manufacturers, not least. Because they import many profitable cars in China that cost more than 100,000 euros, such as the BMW 7 Series, Rolls -Royce or Maybach. Even with small models like 5 Series BMW Top models are not always made in China. Porsche has no domestic production at all, so it will be hit hard by the tax,” Siebert told FOCUS online.

The authors of the IfW study are also critics of the tax and recommend negotiations. They recommend that the EU “enter into negotiations with the government in Beijing to urge it to end subsidies that are harmful to the EU, as part of the recently introduced anti-subsidy mechanism against electric vehicle imports from China.”

Electricity buyers are probably anticipating the next price slide

With this in mind, the wait may be worth it for car buyers who are considering an affordable electric car. The Chinese have to fight the price drop now – if only to avoid alienating the many dealers who are already on board and who were already hoping to land a second Hyundai or Kia model for a BYD, Nio or Great Wall. Prices are likely to drop further – higher discounts can be expected.

In addition, the Chinese car is still a nameless product in Germany, which also affects the residual value. Michael Gerstner, senior analyst of residual value analyst Bähr & Fess Forecasts, explains the Chinese dilemma: “Chinese manufacturers who follow a low-cost strategy must expect lower residual rates compared to established competition. As a result, higher profits of the price at the time of purchase is made clear by the low return on resale. They are already launching new models with a range of up to 1000 km. The old models with a short range are of course more difficult to sell almost immediately, which also increases the pressure on discounts .

VW is calling for a ban with a new bonus

So it is not surprising that manufacturers who also rely 100 percent on electric cars and sell the combustion engine business, which still dominates Europe, are now calling for help from the government – or rather from the taxpayer. In an interview with dpa, VW works council boss Daniela Cavallo recently defended the EU’s policy to ban combustion engines and at the same time called for new subsidies: “Politics must also support this, not only provide guidelines that are right, ” said Cavallo. . For electric car buyers, however, price matters in the end, especially given the poor prospects for electric car sales. And there should be no reason for many buyers not to prefer the Chinese business to VW – especially in leasing, where the residual risk is already set and the lessee replaces the car with a better E after three or four years -What? car business.