Amid China’s National Day celebrations, major cities across the country hosted automotive exhibitions, with new energy vehicles (NEVs) or electric vehicles (EVs) generating the most buzz. Enthusiastic crowds flocked to the exhibitions, eager to trade in their old vehicles for new electric models. Meanwhile, despite the European Union’s recent announcement of increased tariffs on Chinese EVs, the construction of Chinese EV factories in Hungary is proceeding at full speed.
During the long National Day holiday in China, several high-profile exhibitions showcased NEVs, drawing significant attention from potential buyers. One of the key events was the China Motor Show 2024, held at the National Convention and Exhibition Center in Tianjin. The week-long show featured nearly 100 brands from both China and around the world, with half of the vehicles on display being NEVs.
Customers were impressed by the environmentally friendly and energy-efficient innovations, with a range of new products and technologies unveiled at the event. In late August, China introduced a new round of trade-in subsidies to boost passenger car sales, doubling the subsidy amount from 10,000 yuan to 20,000 yuan. The trade-in subsidy for passenger vehicles increased from 7,000 to 15,000 yuan.
In Liaoning Province’s Shenyang city, a six-day automobile trade fair also drew large crowds, with around 30 new car models unveiled. The majority of the booths were dominated by NEVs, which received the most trade-in orders. More than 450,000 visitors attended the fair, leading to over 2.1 billion yuan in sales.
Despite the EU’s increased tariffs on Chinese EVs, construction continues at the $7.3 billion battery factory being built by Chinese company CATL in Hungary. In another Hungarian city, Jászberény, Chinese car giant BYD is constructing its own factory across a 300-acre site, set to begin EV production next year.
Levente Horváth, the founding director of the Eurasia Center at John von Neumann University and former Consul General of Hungary in Shanghai, stated, “In 2023, we saw a surge in Chinese FDI in the EU, particularly in the EV sector, with 44% of it flowing into Hungary. This is a significant figure, although over the past decade, half of Chinese EV investments in Europe have gone to France, Germany, and the UK.”
Hungary has expressed concerns over the possibility of permanent EU tariffs on Chinese electric vehicles. Horváth noted that the EU is divided on the issue of tariffs, while countries like Slovakia, Germany, Spain, and Sweden plan to oppose the measure in the upcoming October vote.
Negotiations between the EU and China are ongoing, as both parties search for alternatives. Failure to reach an agreement could result in a prolonged five-year trade conflict between the EU and China.
Experts have suggested that despite the EU tariffs, Hungary remains competitive in the automotive industry. Tamás Matura, founder of the Central and Eastern Center for Asian Studies at Corvinus University, remarked, “From the Hungarian government’s perspective, the good news is that if the EU takes anti-subsidy measures against Chinese car manufacturers, vehicles produced in Hungary would be exempt, as they are manufactured within Europe.”
Experts also advise that there is still an opportunity for the EU to reconsider and avoid a trade conflict with China.
