Part 4/8:
Key to understanding this development is the cost differential between manufacturing in China versus Europe. Industry estimates indicate that producing EVs in China is approximately 50% cheaper than in Germany, a figure backed by Volkswagen's internal data. This cost advantage motivates Chinese manufacturers to either import fully assembled vehicles or set up local assembly in Europe through partners like Magnus, a contract manufacturer based in Austria known for assembling cars for brands like Jaguar.
Interestingly, even with tariffs—ranging from 18% to 40% depending on the brand—the profit margins for Chinese automakers in Europe remain attractive. The lower production costs in China offset the tariffs, allowing these companies to stay competitive despite Europe's protective measures.