The European Union is erecting new regulatory barriers to defend its market from a Chinese electric-vehicle offensive. Germany and France have agreed that from 2028, subsidies and public procurement benefits within the 27-nation bloc will go only to vehicles that are assembled and developed in the EU and that generate more than 70% of the value of core components excluding batteries, foreign media reported on the 18th. The aim is to tighten the "Made in Europe" standard, a policy favoring manufacturing inside the bloc, in order to block Chinese EVs entering the European market through detours such as Turkey. The EU also plans to cap imports of Chinese hybrid vehicles at 350,000 units a year starting in December, about half the current level.
The EU is raising its defenses because China, armed with prices roughly 20% lower than European models, is threatening the bloc's manufacturing base. Chinese eco-friendly vehicles account for 12% of new car sales in Europe and are rapidly taking market share. In the global EV market outside China, Chinese brands including BYD held a 22.8% share from January through August. The United States has already imposed tariffs of up to 127.5% since 2024 to protect its home market from China's EV push. The EU levies tariffs of up to 45.3%, but has concluded that duties alone are not enough.
With the U.S. and now the EU bolting the door against Chinese products, the Korean government has effectively done nothing. Tariffs on Chinese automobiles stand at just 8%, and taxpayer money is still handed out in purchase subsidies. Electric vehicles were also left out of the "Korean version of the Inflation Reduction Act," which offers tax credits for domestic production in strategic industries. That leaves Korean companies defenseless against the export push by Chinese EV makers backed by massive state support. If this continues, the possibility cannot be ruled out that Korea's own EV market — of which 35% has already gone to Chinese brands — will be swallowed whole.
The auto industry is a core strategic sector that underpins exports and employment, with wide ripple effects on upstream and downstream businesses. If it falters, the entire economy will take a critical hit as the manufacturing base weakens and jobs disappear. To fend off China's relentless EV offensive and preserve the competitiveness of a Korean auto industry now at a crossroads, the most urgent task is to include electric and hybrid vehicles in the Korean version of the IRA being pursued by the government and the National Assembly.