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The development of EVs in China is being driven by a mix of factors. The main one is affordability. Chinese EVs are cheaper than similar designs from Western producers, and many of them provide longer driving ranges-- something that has been a substantial hurdle to EV adoption in the developed world.
Additionally, the Chinese EV market is growing much faster than in other countries due to strong consumer need and government incentives. On the other hand, EV sales in Europe and the United States are still below expectations, in part because they're not inexpensive to the majority of vehicle buyers.
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The Chinese EV industry is also more fully grown than in other parts of the world, which suggests that it has more production experience. In addition, it's much easier for business based in China to take advantage of the big domestic market of its citizens, which makes it possible to scale up quicker than in other areas.
In spite of the many benefits, the Chinese EV market is facing obstacles in its quest to expand abroad. Last year, the European Commission opened an investigation into whether EVs produced in China get unjust subsidies. The investigation could lead to import responsibilities on EVs imported from China, which would injure worldwide car manufacturers that have actually established factories in the country.
China responded to the EU probe with anger, arguing that it's "naked protectionism and will seriously interrupt and distort the worldwide automotive market and supply chain." China's Commerce Ministry said the inquiry was based on "subjective presumptions," lacks evidence, and breaches World Trade Organization guidelines.
The EU's probe is concentrated on 3 Chinese companies-- BYD, SAIC Motor and Geely, which owns the Volvo brand. The examination is expected to take 13 months and might eventually cause import responsibilities on EVs from China. The examination consists of the fact that the companies in question are state-owned, which might provide a benefit over worldwide competitors.
In order to avoid the tariffs, Chinese EV business would need to establish factories in North America, which isn't simple. Up until now, just one company, Nio, has made any strides towards opening an assembly plant in the U.S., and even that has been limited to rented facilities instead of an actual factory. The rest of the industry has been mostly stuck in its home market. However the EU's relocation could assist to pave the way for a larger American market for Chinese EVs. That is, if the business can conquer political frictions and find customers happy to buy their automobiles.
