European Nations Compete For Chinese EV Factories, Jobs

European governments may be wary of budget Chinese electric vehicles (EVs) flooding their markets, but they're also fiercely competing for a share of the manufacturing investment and jobs the new competitors bring, Giulio Piovaccari reported for Reuters.

National governments across the bloc are dangling their own incentives to attract Chinese automakers looking to build European factories. I Photo by Attila Volgyi, Xinhua

While the European Union (EU) investigates China's auto subsidies and considers tariffs on imports, national governments across the bloc are dangling their own incentives to attract Chinese automakers looking to build European factories.

Manufacturing costs for Chinese EV makers including BYD, Chery Automobile, and state-owned SAIC Motor are much lower at home.

However, they are nonetheless keen to set up in Europe to build their brands and save on shipping and potential tariffs, said Gianluca Di Loreto, a partner at consultancy firm Bain & Company.

"Chinese automakers know their cars must be perceived as European if they want to bear interest among European customers," he said.

"This means producing in Europe."

The EU tariff decision is expected this week. On one hand, import taxes could help European automakers better compete with their Chinese counterparts, but they may also spur on Chinese automakers, which are already investing heavily, and for the long-term, in Europe.