Chinese-built electric vehicles pose the greatest risk to Europe's automakers and could cost them 7 billion euros ($7.7 billion) a year in lost profits by 2030 unless policymakers take action, according to an Allianz Trade report.
Policymakers need to meet the challenge with reciprocal tariffs on imported cars from China, do more to develop EV battery materials and technologies, and also allow Chinese carmakers to build cars in Europe, according to the report released on Tuesday by the unit of German insurer Allianz.
Peugeot CEO Linda Jackson also said on Tuesday that Chinese EV makers are a growing threat because they are offering better cars than in the past at affordable prices.
"For me the biggest danger [for electric vehicles prices] is the Chinese coming in because they are coming with quite competitive prices and with very good vehicles," told the Financial Times Future of the Car" conference.
"So what we need to do is make sure that we have the technology and not necessarily trying to get the cheapest car, but get the best value for money," Jackson said. She said recent price cuts by Tesla are adding the pressure faced by the auto industry and lowering the residual value of cars.
Jackson's comments and the Allianz Trade study echoes a warning by Stellantis CEO Carlos Tavares at this year's CES in January that the European auto industry faces a "terrible fight" over with Chinese importers.
Europe's car companies face a dual threat from the prospect of falling sales of their own vehicles in China, where local EV makers have been growing market share, and from rising sales of imported Chinese EVs -- built in China by Chinese or Western automakers.
A crowded market for all-electric SUVs in China is putting pressure on local automakers to export more vehicles to Europe. Chinese EV imports could cost the European Union over 24 billion euros in economic output in 2030, or 0.15 percent of the bloc's gross domestic product, Allianz Trade said.