Can blockades and sanctions save European car companies?

It is reported that the European Union is preparing to wave sanctions against Chinese new energy vehicle companies under the pretext of conducting a countervailing investigation on Chinese new energy vehicles. Reuters even revealed that the European Union may impose retrospective tariffs on Chinese electric vehicles starting from July this year.

As soon as the news came out, it caused industry shock and public opinion boiling. European car companies are even more worried, as they are concerned that China will take retaliatory countermeasures.

In recent years, the rapid development of Chinese new energy vehicle companies has caused deep anxiety in other countries, especially Western countries. According to data, the proportion of China's automobile exports to Europe to China's total vehicle exports increased from 5.7% in 2018 to 39.1% in the first half of 2023.

The once glorious European automobile industry has always been a mythical and unparalleled presence in the market. However, in recent years, European companies have become powerless in the transformation towards electrification and intelligence, especially under the impact of China's new energy vehicles, which have become increasingly fragile. If it continues to develop like this, it may even be completely replaced by Chinese car companies at any time.

However, automobile companies are also one of the most important economic lifelines in Europe. If European state-owned enterprises fall, a large number of unemployed people will be a fatal blow to Europe's already fragile economic chain. This is the underlying logic behind the EU's aggressive decision to sanction Chinese car companies.

However, in the current international environment that advocates for a free market economy and the constraints of the WTO, sanctions seem inadequate. The so-called sanctions that the European Union is preparing to take were actually left to China by the end of the 18th century: if it cannot fight you head-on, it will directly impose isolationism on you. But history has repeatedly proven that isolationism is of no use at all.

Not to mention that China has sufficient corresponding countermeasures, it is from an operational perspective that Chinese automotive companies did not enter the European market through low price dumping and relying on high government subsidies, as accused by the West.

Firstly, in terms of price, Chinese new energy vehicles are not cheap compared to other vehicles in the European market. Taking the price of NIO ET5 and ET7 in Germany as an example, the prices of these two cars are 59500 euros and 81900 euros respectively, with the latter being higher than the Audi Q6 e-tron. It has been proven that the reason why Chinese car companies can stand firm is entirely due to their excellent technology and trustworthy quality.

The so-called government subsidies are even more absurd. The growth of China's automobile exports is not due to receiving huge national subsidies, but rather due to the strong competitiveness of China's industrial chain under sufficient market competition. In fact, in order to achieve fair competition and regulate market order, China requires local governments to no longer provide subsidies for new energy vehicles starting from the end of 2018, and has completely withdrawn by the end of 2022.

Looking at the extended timeline, even if the EU can block Chinese car companies from entering the country through a blockade, how long can it hold them back? Can European car companies become stronger themselves if China's technology cannot enter? It has been proven that anyone who goes against the trend of the times and goes against it cannot escape the fate of being eliminated in the end.

If European car companies really want to survive and develop, the most important thing they need to do is not to sanction Chinese companies or engage in isolationism, but rather to do the opposite: acknowledge their own gaps, break down the technical barriers they have worked hard for many years, open up their doors with an open mind, welcome countries around the world, especially Chinese car companies and advanced Chinese new energy industry technologies, cooperation and win-win is the fundamental way out. It is reported that the governments of Hungary, Italy and other countries are actively promoting Chinese new energy vehicle companies to build factories in Europe.

At the same time, we should immediately transform and delve into new fields, especially in the field of technology, like Chinese enterprises. We should actively promote the application of high-tech, including AI technology, in future automobiles, upgrade the user riding experience, enhance customer attraction, and enhance the core competitiveness of the enterprise. This is the key to solving problems and the essence of the problem.