According to a study by insurance group Allianz, Chinese companies are taking a bigger share of the domestic market from Western brands with their modern electric vehicles, thanks to a European Union agreement to ban new internal combustion engine cars from 2035.
Taken together, the two could mean Europe loses tens of billions of dollars in economic value by 2030, Allianz calculates.
Chinese brands increased their share of the domestic market to 50 percent last year, according to Research released Tuesday by Allianz Research (see chart above).
This is 10 percentage points higher than in 2020, which is due to domestic manufacturers accounting for 80 percent of electric vehicle sales in China, according to the information.
Without Tesla, that share would be closer to 90 per cent -- the US company currently trails BYD in China, but still accounts for about 10 per cent of the market.
In one scenario, Allianz Research calculates that if Chinese manufacturers' share in their home country continues to increase, it would mean a 39% drop in European car sales in China by 2030, which alone could knock 7.3 billion euros off European manufacturers' profits.
At the same time, the scenario envisages electric cars increasing their share of new vehicle registrations in Europe to 80 per cent by 2030.
Due to attractive supply from China, 1.5 million units should come from China this year, accounting for 13.5 percent of EU production in 2022.
This will mainly come at the expense of local manufacturers, following the closure of dozens of factories in Europe in recent years, according to Allianz research.
The study goes on to say that with an economic added value of 14,200 euros per vehicle, the EU auto industry could lose 24.2 billion euros directly as a result, and due to reduced exports to China.
This would be equivalent to 0.15% of the region's entire GDP in 2022, but the proportion of auto countries is higher: according to the data, Germany accounts for 58% of European auto value creation, China's electric vehicles may generate about 0.35% and cars will lose GDP in 2030;
The value is higher only in the Czech Republic and Slovakia.
According to Allianz, European auto suppliers could lose up to 21 billion euros in economic value by 2030.