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China's high-level visit to Europe can be said to have caused quite a stir. Especially in Germany, why did they, who have always been proud of the automobile manufacturing industry, suddenly stand up for China's electric vehicles and oppose the EU's tariffs on them? Do you want to know the reason behind this? Is it just because the pace of development of electric vehicles in Germany is a little slow? Or is it because of the fear of losing this huge market in China? Perhaps, things are not as simple as they seem. Follow me to find out, don't easily believe in superficial phenomena, the truth is often hidden under the surface!
Recently, a high-level visit to Europe by the Chinese side seems to have caused quite a stir in Germany. Germany, the center of the auto industry, suddenly expressed its opposition to the EU's tariffs on Chinese electric vehicles, which surprised the outside world. A series of actions by the German automotive industry may seem illogical, but they are reasonable.
Let's take a look at the current state of the automotive industry in Germany. Germany has car giants such as BMW, Mercedes-Benz, and Volkswagen, which occupy an important position in the global automotive market. But in recent years, the pace of development of electric vehicles has not been satisfactory. Mercedes-Benz even had to abandon plans for full electrification in February this year, and Volkswagen postponed the site selection of a battery plant. Why are these giants struggling? The reason is that the construction of new energy vehicle infrastructure in Europe is slow, and government subsidies are also decreasing, making the cost-benefit ratio of producing electric vehicles unsatisfactory.
But on the other hand, the development of China's electric vehicle industry is booming. At the end of last year, BYD had already established a vehicle production base in Hungary, and Great Wall Motor also announced that it would build an electric vehicle production base there. These actions of Chinese companies have not only created a large number of local jobs, but may also partially solve the financial and technical problems of European companies. The main export market for Hungarian cars is in the European Union, and a large number of products are sold to Germany, which creates a situation where you have me and I have you.
Moreover, German car companies are very dependent on the Chinese market. According to BMW, revenue from China accounted for 32% of total revenue in the first quarter of this year, and Mercedes-Benz's sales in China accounted for 36% of total global sales, far exceeding sales in the United States. Under such circumstances, German companies naturally do not want to see the deterioration of Sino-European relations, let alone lose the huge market of China for political reasons.
The in-depth cooperation between German automotive companies in China is also continuously strengthened. Just last month, the Volkswagen Group announced that it would continue to invest 2.5 billion euros in the Chinese market and jointly develop new models with Xpeng Motors in Hefei. This two-way cooperation model has forced German companies to speak out and protect their interests in the Chinese market in the face of EU pressure.
European Commission President Ursula von der Leyen still insists on proposing tariffs on Chinese electric vehicles, claiming that this is due to "overcapacity" in China. However, this approach is regarded by the German automobile industry as "lifting a stone to shoot itself in the foot". German Transport Minister Volker Wiesing also stressed that international trade should be conducted on a level playing field, rather than starting a trade war through punitive tariffs.
Behind this, it is not difficult to see that the change in Germany's attitude in the field of electric vehicles is actually a strategic adjustment. With the development of electric vehicle technology and changes in the market, Germany has realized that going it alone is not the best option. Instead of going head-to-head with China in technology or the market, it is better to seek cooperation and share the dividends brought by the market.
But this cooperation is not without risk. On the one hand, the rapid rise of electric vehicles in China has brought huge market pressure to traditional German automakers. Not only has China made a breakthrough in battery technology, but the price-performance ratio of its electric vehicles has also attracted many consumers. On the other hand, German companies are also worried that over-reliance on the Chinese market may face the risk of policy or market uncertainty at some point in the future.
This complex interaction of international trade and markets has caused German automakers to oscillate between support and opposition. They need to protect their home base while ensuring they remain competitive in global markets, especially in key markets like China.
The changing attitudes of the German government and companies also reflect Europe's new role and strategic adjustment in the global economy. Faced with competition from two economic superpowers, the United States and China, Europe is seeking a path that will both maintain its economic independence and remain competitive in the global marketplace.
epilogue
Germany's changing attitude towards electric vehicles in China is part of its industrial strategy and a response to changes in the global market. The warning of the German auto giants is not only an opposition to the upcoming tariff policy, but also a thoughtful consideration of the future market layout. Germany and the EU must find a balance between safeguarding their own interests and promoting international cooperation. For our ordinary consumers, this cross-border battle for electric vehicles not only affects the global automotive industry, but also affects the diversity and economy of each of us in the future. In these fast-changing times, keeping an open mind and understanding the underlying reasons may help us better meet the challenges ahead.