China’s electric vehicle market price war could impact European new and used car markets, says Indicata.
Chinese manufacturers have been slashing prices by up to 34% and average EV discounts have reached a record 17%. This could impact new and used car values in the UK.
Andy Shields, Indicata’s global business unit director, said: “Chinese OEMs are facing massive oversupply and intense competition in their domestic market.
“They need to find markets outside of China to sell their vehicles, and Europe represents their most viable and profitable export destination.”
Chinese OEMs are now increasing their focus on ICE and hybrid vehicles rather than BEV production in response to tariff considerations and a lack of accelerated consumer demand for BEVs.
Shields said: “Whilst there are tariffs in place for BEVs in the EU, it’s still possible for Chinese manufacturers to sell BEVs in Europe more profitably than in their home market.
“The UK market is particularly exposed as there are currently no additional tariffs on Chinese BEVs.”
Pressure on UK markets to absorb Chinese-produced vehicles will increase as manufacturers seek new outlets for their excess production.
Although European consumers can expect short-term benefits such as access to lower-priced vehicles, technologically advanced vehicles, the competitively priced Chinese vehicles could create downward pressure on used vehicle valuations in the long-term.
