Great analysis as per usual from Azeem. This fits a historical pattern perfectly. We saw the same playbook with Japan and then South Korea in the auto industry. They started as underdogs, relentlessly improved their products, and eventually reshaped the global market.
The fascinating difference with China is the deliberate, state-backed strategy to leapfrog everyone by betting on EVs over a decade ago. Instead of trying to beat legacy automakers at their own game, they changed the game completely. The results are stunning: China is selling record numbers of EVs, but now as the US and EU slow down they have a glut of EVs. Now China's manufacturers account for nearly two-thirds of all electric cars sold globally. Almost half of all cars sold in China are now electric and meeting their environmental targets.
The new tariffs from the US and EU feel like a predictable defensive reaction, much like the import quotas placed on Japanese cars in the 80s. The next chapter is already unfolding as Chinese firms expand into Europe and build factories, hiring people displaced from legacy car manufacturing, there to bypass these barriers. It's a recurring cycle of disruption and adaptation, and it’s far from over.
What do you think will happen to Europe’s car industry?
In places like the Middle East (e.g. Dubai), european companies already struggle without duty protection. Chinese EVs are eating up the market (e.g. just observe the collapse of second hand vehicle price)
For me, the scary moment is thinking about the entire automotive supply chain, not only about VW or BMW. Europe may soon face the same fate as its solar panel industry—outcompeted on cost, scale, and software by China. What's the future of Europe then if million of jobs will be lost?
Great analysis as per usual from Azeem. This fits a historical pattern perfectly. We saw the same playbook with Japan and then South Korea in the auto industry. They started as underdogs, relentlessly improved their products, and eventually reshaped the global market.
The fascinating difference with China is the deliberate, state-backed strategy to leapfrog everyone by betting on EVs over a decade ago. Instead of trying to beat legacy automakers at their own game, they changed the game completely. The results are stunning: China is selling record numbers of EVs, but now as the US and EU slow down they have a glut of EVs. Now China's manufacturers account for nearly two-thirds of all electric cars sold globally. Almost half of all cars sold in China are now electric and meeting their environmental targets.
The new tariffs from the US and EU feel like a predictable defensive reaction, much like the import quotas placed on Japanese cars in the 80s. The next chapter is already unfolding as Chinese firms expand into Europe and build factories, hiring people displaced from legacy car manufacturing, there to bypass these barriers. It's a recurring cycle of disruption and adaptation, and it’s far from over.
Nice overview.
What do you think will happen to Europe’s car industry?
In places like the Middle East (e.g. Dubai), european companies already struggle without duty protection. Chinese EVs are eating up the market (e.g. just observe the collapse of second hand vehicle price)
For me, the scary moment is thinking about the entire automotive supply chain, not only about VW or BMW. Europe may soon face the same fate as its solar panel industry—outcompeted on cost, scale, and software by China. What's the future of Europe then if million of jobs will be lost?