The Battle for the Future of the European Car Industry

The European elections are fast approaching, and with them comes the possibility of reversing the ban on petrol and diesel cars from 2035. At the same time, there is an anti-dumping investigation against incentives for the electric vehicle industry in China. These events are set to shape the future of the automotive industry in the Old Continent.

Recent meetings between Chinese President Xi Jinping and European leaders have shed light on the imbalances in trade relations between the two regions. European Commission President Ursula von der Leyen has made it clear that Europe will defend its companies and economies against subsidized products from China, such as electric vehicles and steel, which are flooding the European market.

The European Union is currently investigating Beijing’s subsidies to local manufacturers, with the possibility of imposing punitive tariffs before the summer break. This move could level the playing field for European manufacturers, who currently face higher import-export taxes compared to their Asian counterparts.

Chinese manufacturers, such as BYD, are already making plans to open new plants in Europe to avoid potential tariffs. BYD has announced an electric car plant in Hungary, set to start production in 2026. European countries, including France, are competing to attract investment from Chinese manufacturers, with the hope of boosting their own automotive industries.

While Italy was initially in talks with BYD for a potential factory, the manufacturer has since closed its doors to the Peninsula. However, a second European factory could still be on the horizon, with potential locations in Italy, Spain, France, or Germany.

The coming weeks will be crucial for the automotive industry in Europe, as decisions on tariffs and investments will shape the future of electric vehicles on the continent. Stay tuned for updates on this evolving situation.