According to Argus, Chinese-produced electric vehicles (EVs) are expected to make up 25% of new EV sales in Europe in 2024, up from 19.5% in 2023. The main Chinese brand for EVs sold in Europe is Tesla, followed by Renault's Dacia brand. Chinese EV brands like BYD are also rapidly gaining market share, projected to reach 20% by 2027.The campaign group Transport & Environment (T&E) recommends that the EU impose tariffs of around 25% on Chinese EVs to protect European carmakers in the short term. This is higher than the current 10% tariff. T&E argues this will force carmakers to localize EV production in Europe, which is needed for their long-term survival.

However, T&E also notes that tariffs will not shield legacy European carmakers forever, as Chinese companies are rapidly investing in battery factories and EV production facilities within the EU. By 2025, Chinese investments are expected to produce over 214 GWh of batteries in Europe, more than triple the total 2022 capacity.

While some are concerned about the pace of Chinese investment, others see it as necessary for the UK and EU to meet local content requirements for EV batteries under the EU's Rules of Origin legislation coming into effect in 2027. Domestic battery production is seen as crucial to maintain the competitiveness of European EV exports.