Slovak economy threatened by Chinese electric vehicle dominance

The Slovak economy is the most vulnerable when it comes to Chinese car imports and could lose approximately 0.4% of its GDP if no action is taken, according to a new study by German insurer Allianz.

Chinese-built electric vehicles pose a great risk to Europe’s carmakers and could cost them €7 billion a year in lost profits by 2030 unless policymakers take action.

Slovakia produces the most cars per capita in the bloc and is the most vulnerable EU member state, according to the report. Among other vulnerable countries are the Czech Republic, Germany, Sweden and Poland.

Imports of Chinese carmakers have been rising for several years, and so has the share of Chinese brands in the European EV market.

As of 2019, it has increased from less than 1% to 5% in the first half of 2022. China also poured a substantial amount of money into subsidies for carmakers and into charging infrastructure. It also has a competitive advantage over its European and American rivals in accessing critical raw materials needed for battery production.

“If we could say that China was marginal in the combustion engine cars production, this is no longer the case with EVs,” Patrik Križanský, director of the Slovak Electric Vehicles Association (SEVA), told EURACTIV Slovakia.

Automotive representatives call for action on the EU level to protect European industry.

“Given the strategic importance of the automotive sector for the European economy, policymakers could seek reciprocal trade terms with China and the US, as well as promote BEV adoption through improved charging infrastructure,” the study said.

“Moreover, allowing Chinese investment in local car assembly could generate more added value in the region while increasing self-sufficiency in raw materials critical for battery manufacturing and investing in next-generation battery technologies will further help Europe’s automotive sector prepare for tomorrow’s challenges,” it added.

(Michal Hudec | EURACTIV.sk)