The latest statistics from the European Automobile Manufacturers Association (ACEA) show that in September 2024, new car registrations in the European Union fell by 6.1%. Among the four major markets, France saw a decrease of 11.1%, Italy by 10.7%, and Germany by 7%, while only Spain recorded a 6.3% increase. In the first nine months, electric vehicle sales in the EU fell by 5.8% year-on-year, with market share dropping to 13.1%, mainly due to a significant decline in electric vehicle sales in Germany (28.6%).

With slower sales growth, persistent weak demand, changes in subsidy policies, and tariff disputes between China and Europe intensifying competition in the European automotive market, the 90th Paris Motor Show was held in this environment. Through the Paris Motor Show, we can glimpse changes in the global automotive industry landscape, the "catch-up" of European auto manufacturers, and the different strategies of Chinese auto manufacturers entering Europe under the influence of tariff disputes.

▍Divergent Strategies of Chinese Auto Makers

At this year's Paris Motor Show, the main participants were from European and American brands (such as Renault, Citroen, Peugeot, BMW, Volkswagen, Audi, etc.), with only nine Chinese OEMs participating, accounting for only one-fifth of the total number of participating automakers. In contrast, there were as many as 75 Chinese companies participating in the 2023 Munich Motor Show, setting a record for the largest Chinese presence at an overseas auto show.

The sharp decline in the number of participating Chinese automakers is related to the EU's tariffs on imported pure electric vehicles from China. Due to the tariff impact, many automakers have postponed or adjusted their entry plans into Europe. Great Wall Motor closed its European headquarters in the middle of this year, while Chery Automobile has postponed the production of electric vehicles in Spain and is reassessing how EU tariffs will affect its plans to import semi-finished vehicles for final assembly.

Among the participating Chinese automakers, BYD chose to continue its push into Europe. At the Paris Motor Show, BYD launched the SEALION 7 (Haishi 07EV), which was interpreted by foreign media as a direct competitor to Tesla's Model Y. The premium model Nio ET7 was also showcased, described as an SUV that can "swim for 30 minutes." Shu Youxing, General Manager of BYD Europe Sales, said at the show, "In 2022, BYD debuted in Europe with three models at the Paris Motor Show. Just two years later, we have eight models available for consumers to choose from," representing BYD's commitment to deepening its presence in the European market.

Zero Run, which has partnered with the European automotive group Stellantis, brought four models to the Paris Motor Show, including the compact SUV B10, which will be produced in Poland and sold in Europe. According to the strategic cooperation agreement signed between the two parties in October 2023, Zero Run is primarily responsible for products and technology, while the Stellantis Group is responsible for marketing and channels.

XPeng Motors, one of the new energy vehicle (NEV) startups, launched its flagship smart electric vehicle, the P7+, at the show. During the launch, XPeng emphasized Europe as a core market for its long-term commitment. Notably, French President Emmanuel Macron, as the host, visited the XPeng booth and invited the company to invest in France.

▍European Auto Makers Face "Market Choices"

Currently, European auto manufacturers are facing several harsh realities on the path to full electrification. The lack of affordable electric vehicles has been a core factor hindering the growth of the European electric vehicle market.

At this year's show, many European automakers showcased a series of affordable electric models. The Renault R4/R5 starts at 25,000 euros (approximately 190,000 RMB), targeting the affordable market. The Citroen e-C3 is priced at around 23,300 euros (approximately 180,000 RMB) and plans to introduce a 19,999 euro (approximately 150,000 RMB) version next year.

In addition, small two-seater vehicles like the Citroen Ami and Renault Duo were also on display at the Paris Motor Show, priced at around 8,000 euros (approximately 60,000 RMB), targeting teenagers aged 14 and above. European laws allow teenagers without a full driver's license to drive such vehicles with a maximum speed limit of 45 km/h after an 8-hour training course. These vehicles, with their slow speed and short range, are similar to the "old man's joy" in the Chinese market.

The once-glamorous Paris Motor Show is now more "down-to-earth." Besides the long-standing preference for small cars among European citizens, the local market has undergone tremendous changes. Simply put, not only are high-priced cars struggling to sell in Europe, but even cheaper cars are starting to have trouble finding buyers.

Previously, according to data released by ACEA, new car sales in the EU fell by 18.3% year-on-year in August, with approximately 643,600 vehicles sold, the lowest level in three years. Sales in major markets such as Germany, France, and Italy saw double-digit declines, falling by 27.8%, 24.3%, and 13.4%, respectively.

In terms of manufacturer performance, car registrations for the top three European automakers - Volkswagen, Stellantis, and Renault - fell by 14.8%, 29.5%, and 13.9%, respectively, compared to the same period last year.

Furthermore, electric vehicle registrations in Europe plummeted by 44% in August, dropping to approximately 92,600 vehicles, with market share slipping from 21% in 2023 to 14%. Germany and France saw even more drastic declines, with drops of 68.8% and 33.1%, respectively. Even Tesla, which has been selling well, saw sales decline by over 40%. The reason for this is that most regions in Europe have abolished subsidy policies. For example, the German government abolished subsidies of up to 6,000 euros for electric vehicles at the end of 2023, resulting in a nearly 70% year-on-year decline this year.

Similar to the early stages of domestic NEV development, European consumers only considered electric vehicles due to substantial subsidies. Chinese automakers, with their price advantage over European brands, offer cheaper and better products that will significantly influence European consumers' purchasing decisions. This is why the EU has imposed high tariffs on Chinese automakers.

At this year's Paris Motor Show, the introduction of more "cost-effective" electric vehicles by European automakers is more like a direct counterattack against Chinese automakers. European automakers are determined to defend their home market.

The EU's tariffs on imported electric vehicles from China have slowed down the pace of Chinese automakers' entry into Europe to some extent but cannot stop their expansion and establishment in the region. In the future, whether by establishing production bases locally in Europe or partnering with local brands, Chinese automakers aim to create more competitive vehicle models. In the long run, these initiatives are expected to reshape the electric vehicle market landscape in Europe and globally.

Typesetting by Zheng Li

Source: Apnews, Europe.autonews, Cnbc

Image Source: Shutterstock