China’s EV boom has the EU setting up roadblocks. Can cooperation clear the way?

This year marks half a century of formal diplomatic relations between China and the European Union, as well as the 25th anniversary of the founding of the European Union Chamber of Commerce in China. The latest story in our series examining ties between the two powers focuses on intensified competition in the auto industry, a bedrock sector for Europe and an area where China has made enormous strides, particularly in electric vehicles and other hi-tech advancements.

When Volkswagen engineers arrived at the facilities of Chinese carmaker First Automobile Works’ (FAW) in the early 1990s, they saw a factory stuck in the past.

As its name suggests, FAW was China’s first automobile manufacturer, founded in 1953. With factories built under the guidance of engineers from the Soviet Union and its first model adopted from Moscow-based Zil, the firm spent its early life as a crown jewel of China’s state industries and a symbol of collaboration between the world’s largest socialist countries.

But decades after the planned economy era ended, the German engineers visiting FAW felt little had changed.

After FAW-Volkswagen was established in 1991 – the German automotive champion’s second joint venture with a Chinese firm – overseas personnel found themselves teaching their local counterparts methods of industrial production that had long become second nature.

“It was really a process of learning and getting up things and understanding,” said Beatrix Keim, director of Centre Automotive Research, a German automotive think tank.

She first joined FAW-Volkswagen in 1998, spending more than a decade in China with various European carmakers before returning to Germany.

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