The nation’s manufacturers now lead in sales and materials supply.
The UK’s popular electric car choice is the MG4, outselling others. Launched in 2022, it sold 5,200 units in the first three months of this year, ranking second to Tesla’s Model Y. Priced at around £27,000, it’s notably more affordable than the £45,000 Tesla. Although MG is a well-known British car brand with a century of history in Birmingham, its recent success is attributed to Chinese ownership. Since 2007, China’s largest carmaker, SAIC, has owned the company and produced the cars.
In recent years, China has been producing EVs of such quality and affordability that it concerns Western car manufacturers. In China, over 25% of new car sales last year were EVs or hybrids, compared to the global average of 13%. Moreover, more than half of the 850,000 electric passenger cars imported to Europe in 2022 came from China.
China’s President, Xi Jinping, has committed to achieving net-zero emissions by 2060, while the EU aims for the same goal by 2050. EV adoption is vital for both regions, and China is leading the race. By 2025, it is projected that 13% of China’s vehicle fleet will be fully electric or hybrid, in contrast to the global figure of 6%.
Despite the remarkable growth, some analysts are questioning whether China’s EV industry can maintain its rapid pace. The reduction of state support and geopolitical tensions affecting global car demand are factors raising concerns about the industry’s future acceleration.
Beijing remains vigilant about this issue. Tesla vehicles have faced repeated bans from specific areas when China’s leaders are present. Recently, Chengdu restricted Teslas from locations related to Xi’s planned visit for the University Games, a sports event that commenced on Friday.
There is also an economic concern. Allianz, the insurer, warned in May that Chinese-made EVs could cost European carmakers €7bn (£6bn) annually in lost profits by 2030. However, the US and Europe are divided on how to balance these worries against the goal of transitioning drivers away from fossil fuels. European manufacturers, particularly premium brands like BMW, Audi, and Mercedes-Benz from Germany, heavily rely on sales in China and understand that restricting China’s access to European markets could have adverse effects.
Navigating this situation will be challenging for UK and European politicians who have committed to phasing out internal combustion engines by 2030 and 2035, respectively, without depending on Chinese EVs, as pointed out by Le.
Human rights groups hope that the concerns about rights abuses in the EV supply chain do not go unnoticed. Researchers from Sheffield Hallam University have observed that a significant portion of China’s lithium processing takes place in Xinjiang, a region predominantly inhabited by Uyghurs, where there have been reports of forced labor (denied by the Chinese government). Companies venturing into the rapidly growing lithium EV battery market or emerging technologies must be cautious to avoid supply chain risks linked to forced labor in Xinjiang, as mentioned in a report by the researchers last year.
