Let markets decide, not EU, says Mercedes CEO

The European Union's protectionism against Chinese electric vehicles is "the wrong way", as increased competition from China would help Europe's carmakers produce better cars in the long run, said Mercedes-Benz CEO Ola Kaellenius.

Chinese companies looking to export to Europe was a "natural progression of competition and it needs to be met with better product, better technology, more agility", said Kaellenius in an interview with the Financial Times newspaper.

The European Commission is investigating whether Chinese carmakers are receiving subsidies from the Chinese government that enable them to lower prices on vehicles exported to Europe.

"We as companies are not asking for protection and I believe the best Chinese companies are not asking for protection. They want to compete in the world like everybody else," said Kaellenius.

"If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case," he said. "That is the market economy. Let competition play out," he said.

Kaellenius was the latest automotive executive to speak against trade protectionism.

At 2023 IAA Mobility in Munich, where Chinese new energy vehicle brands including BYD and Leapmotor showcased their latest models and technologies, Volkswagen AG's top executive Oliver Blume said strong competition sends consumers positive signals.

"When you have strong competition, you have to improve yourself; you can't rest on what you have achieved," Blume told China Daily.

"I am a supporter of worldwide trade, because that is a big advantage for all countries to bring wealth, to improve the economic situation of each country. That is, in the end, a benefit for all people," he said.

Mathias Miedreich, CEO of Umicore, one of the world's biggest battery materials manufacturers, said sales of Chinese electric cars were surging because of better performance and affordability.

"They are simply good cars and people buy them," he said in an interview with the Financial Times, referring to Chinese vehicles.

In 2023, China exported 1.2 million NEVs, including electric ones and plug-in hybrids, with Southeast Asia and Europe as their major destinations.

They were not all Chinese marques, though. Tesla's Model 3 and Model Y made at its Shanghai plant accounted for quite a chunk of the exports. There were also Renaults made at the French marque's Chinese plant.

The arrival of Chinese EVs has added impetus to European automakers' efforts to develop more affordable models.

"Of course, everybody is trying to reduce the cost of EVs" to reach price parity with combustion engine models, said Renault CEO Luca de Meo.

Stellantis, which owns Peugeot and Citroen, has partnered with Chinese startup Leapmotor to explore overseas markets.

Volkswagen is seeing its ID. series EVs gaining popularity in China, its largest market. The ID.3, with more than 75,700 units delivered in 2023, is one of the best-selling models in China's EV segment.

The car group's EV deliveries in China reached 191,800 units in 2023, up 23.2 percent year-on-year.

Volkswagen has also teamed up with Xpeng to codevelop two EV models for Chinese customers.

The German carmaker said in late February that the two models will hit the market in 2026, with the first one being an electric SUV.