Tesla
looks like an indirect winner from European protectionist measures, with the U.S. electric-vehicle maker likely to benefit as regulators prepare to crack down on emerging competition from high-growth Chinese names such as
NIO,
BYD,
and
XPeng.
The European Commission is launching an investigation into electric vehicles coming from China, President Ursula von der Leyen—the head of the executive branch of the European Union—said in a speech Wednesday.
“Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies,” von der Leyen’s prepared remarks read. “This is distorting our market. And as we do not accept this from the inside, we do not accept this from the outside. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China.”
The move looks like a bid to shore up legacy car makers at the heart of the European economy, such as
Volkswagen
(ticker: VOW3.Germany),
Mercedes-Benz
(MBG.Germany), and
Stellantis
(STLA). While these groups have made a successful push into electric vehicles, they are under increasing pressure from Chinese brands.
The single fastest-growing EV manufacturer in Europe is China’s BYD (1211.China), with registrations from January to the end of July up 323% in 2023, according to Matthias Schmidt, the publisher of the European Electric Car Report. Schmidt’s research covers markets representing 95% of the European region’s EV volumes.
It’s understandable why the EU might want to act. Chinese manufacturers’ registrations ballooned more than 130% year over year in the January to July period, while European peers notched relatively anemic 36% growth. But American manufacturers—not under fire from the EU investigation—recorded a 108% surge in registrations over the same period.
One name dominates:
Tesla
(TSLA), which is likely to be an unexpected beneficiary of any material protectionist measures that emerge out of the EU investigation. Tesla’s share in Europe accounted for almost 19% of the market in 2023 as of the end of July, up 129% from its 12% share across the same period in 2022, according to Schmidt.
The company’s Model Y is, by far, the region’s best selling EV, with 14% annual market share as of the end of July dominating the closest rival, the Volkswagen ID.4, with 5%, per Schmidt’s research.
Shares in Tesla were up 2% on Wednesday, and European auto stocks also rose. Chinese names were among those in the red, as
NIO’s
U.S.-listed stock fell 3.6% with
XPeng
shares down 2.2%.
Write to Jack Denton at [email protected]
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