Ship shortage disrupts export of8k8+com+login electric cars

China's hopes of expanding sales of its electric vehicles, or EVs, in Europe have been hit by an unlikely traffic jam, as manufacturers struggle to find adequate numbers of car-moving ships to transport the vehicles to market.

The Financial Times reports that during the pandemic, many older vessels were scrapped when the automotive industry was mothballed, but now, an unexpectedly sharp revival of the market, coupled with delays to the introduction of replacement shipping vessels, means transportation demand outstrips supply.

According to Forbes magazine, European manufacturers are around five years behind their China counterparts when it comes to making and selling EVs, with Chinese vehicles also enjoying a considerable price advantage in a market that is only going to get bigger in the coming years.

It quoted investment bank UBS as forecasting that sales for battery EVs in Europe will go from 2.5 million in 2024 to 3.6 million in 2025, then more than double to 9.6 million in 2030.

According to the paper, Europe is the region with the largest increase in car imports, up by around 40 percent in 2023.

China, Japan, and South Korea are among the biggest exporters. The China Association of Automobile Manufacturers said the nation exported 1.09 million new energy vehicles in the first 11 months of 2023, up 83.5 percent year-on-year.

But growth could be hamstrung by the limited capacity to shift the hardware, which has also resulted in a hike in shipping prices to use those vessels that are actually available.

"The market's very tight," said Stephen Gordon, shipping agent Clarksons' research director. "Partly, lots of cars are being moved around… and there haven't been many new buildings (of ships) coming into the market."

The increased cost of shipping could also take the edge off Chinese manufacturers' competitive pricing, warned Matt Schmidt of Schmidt Automotive Research.

"Due to the lack of supply, the price for chartering vessels has completely exploded, likely wiping out a larger part of the production savings made from manufacturing vehicles in lower-cost countries like China," he said.

The new year began with the announcement that Shenzhen-based EV giant BYD had, for the first time, surpassed Tesla in terms of sales, selling 526,000 fully-electric vehicles in the last three months of 2023, compared to Tesla's 484,000.

"The government in China went all-in on EVs," Erica Downs, an expert in China's energy markets at Columbia University's Center on Global Energy Policy, told the Foreign Policy website. "This was an industry that they wanted to develop, and they made sure that they had the different building blocks needed for success in place, so there were subsidies to EV manufacturers; there were subsidies to EV buyers; and they've been working on making sure there is adequate charging infrastructure."

Another strong card in China's hand is its dominance of global battery supply chains, through mineral resources.

"Right now, Europe and the United States aren't even in the game when it comes to rare earths, battery cell manufacturing, rare-earth mining and refining," said Tu Le, managing director of consultancy Sino Auto Insights.