At the 2024 Paris Auto Show, tensions between Chinese and European automakers were palpable as the EU plans to implement tariffs on Chinese-made electric vehicles (EVs). This comes at a critical time when European car manufacturers are striving to assert their dominance at home, while Chinese brands are looking to expand their footprint in the competitive market.

Key Points from the Paris Auto Show:

  • Chinese Presence: Nine Chinese brands, including BYD and Leapmotor, showcased their latest models, signalling their ambitions to compete robustly in the European market despite potential new tariffs.
  • EU Tariffs: The proposed EU tariffs, which could be as high as 45%, are aimed at countering subsidies Chinese manufacturers receive from Beijing. This has caused concern among Chinese automakers, who argue that this move could make EVs more expensive and less accessible to European consumers.
  • European Response: European automakers are on the defensive, trying to protect their market share. Stellantis CEO Carlos Tavares highlighted that the tariffs might lead Chinese companies to establish European manufacturing bases, potentially increasing overcapacity and forcing local firms to shut down.
  • Market Dynamics: The show occurs amid a backdrop of declining car sales in Europe and a contentious global economic environment affecting the automotive industry. European brands like Volkswagen, Mercedes-Benz, and BMW have issued profit warnings, primarily due to challenges in the Chinese market.
  • Future Strategies: Both Chinese and European manufacturers are navigating these challenges with strategic moves such as accelerating the development of new EVs and adjusting market strategies to maintain competitiveness.

The Paris Auto Show serves as a microcosm of the global automotive industry’s current state, reflecting broader geopolitical tensions, economic pressures, and the rapid evolution of the EV sector. As tariffs loom, automakers on both sides are recalibrating their strategies to adapt to the increasingly complex market landscape.