J.P. Morgan: Competition from Chinese EVs is another headwind for European automakers

J.P. Morgan: Competition from Chinese EVs is another headwind for European automakers

9 september 2024

Energietransitie
Duurzaam (15) Elektrische auto

European automakers have had a challenging few years, as noted by J.P. Morgan. This is exemplified by Volkswagen’s recent announcement that it is considering shutting factories in Germany for the first time.

According to J.P. Morgan, the sector is struggling to deal with still-elevated energy prices, climate-related regulation, and high financing costs. Alongside these headwinds, automakers are also facing increasing competition from Chinese firms. The Chinese government provides large direct and indirect subsidies to Chinese carmakers, helping these companies to undercut European firms’ prices – both in Europe and in third countries to which European carmakers have historically exported. Interest rate cuts from the European Central Bank could provide a boost to indebted European autos companies on the margin. But absent an unlikely shift in EU climate and energy policies, tariffs currently look like the only option to support carmakers’ domestic competitiveness.


JPMorgan_Insights_Weekly_Brief_EN

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