By 2030, Chinese automotive manufacturers are projected to hold a 33% share of the global market. This includes a 20% share in the Mexican market, according to a report by AlixPartners consulting firm.
Mark Wakefield, the global leader of automotive and industrial practices at AlixPartners, stated that for Western automakers, the competition is not only in the Chinese market but also globally against Chinese manufacturers.
The findings indicate that even as the U.S. implements trade policies to protect its domestic market, Chinese automakers continue their steady march toward global dominance, thanks to the competitive pricing of their electric vehicles. While current trade protection policies safeguard the U.S. and Canada, Chinese automakers are still moving toward these markets.
Analysts highlighted how Chinese automakers have issued a series of announcements regarding the production and assembly of electric vehicles outside of China. BYD, Chery, and Great Wall have promoted production plans in Mexico. BYD and Great Wall have also announced manufacturing plans in Brazil and Europe, while SAIC MG, Chery, Leap Motor, and Geely have announced production in Europe. These announcements could complicate efforts to avoid reliance on Chinese manufacturing.
Andrew Bergbaum from AlixPartners noted, "Tariffs are likely to only buy time and nothing more." He added, "Ultimately, as local production begins, especially in Europe, tariffs will clearly mean nothing anyway."
The Biden administration raised tariffs on Chinese electric vehicles in May to 102.5% from 27.5%. However, Chinese manufacturers can benefit from the agreement between the U.S., Mexico, and Canada. This policy allows vehicles to enter the U.S. from Mexico tariff-free if 75% of the vehicles and parts come from North America and 40% come from places where wages are $16/hour or more. However, the U.S. government has the opportunity to review the agreement in conjunction with Canada and Mexico in 2026.
AlixPartners found that the market share of Chinese brands in the European automotive market is expected to double to 12% by 2030, and more than double in Russia to 69%. The firm anticipates that the market share of Chinese brands in Central and South America will triple to 28%, and nearly quadruple in the Middle East and Africa to 39%. It is also expected that Chinese brands will achieve more than 30% market share in South Asia and Southeast Asia, up from just 3% in 2024.
Currently, local brands hold 59% of the market in China, with expectations to rise to 72% by 2030. Wakefield stated, "What this means for foreign companies is that the Chinese market is essentially a shrinking market."
Chinese manufacturers have leveraged many unique advantages. Large government subsidies allow them to offer vehicles at very low prices. The BYD Seagull is sold for less than $11,000. In comparison, the average price of an electric vehicle in the U.S. in April was $55,242.
Chinese automakers have years of experience in manufacturing electric vehicles, and consumers there are surpassing Americans in their demand for advanced software-driven features.
Senior Writer The quest for automotive knowledge began as soon as the earliest memories. Various sources information, even questionable ones, have been explored including video games, television, magazines, or even internet forums. Still stuck in that rabbit hole.
