China’s EV race drives surge in car-carrying ships

A record number of car carrier ships were ordered last year as Chinese carmakers accelerated deliveries of electric vehicles to the West.

At least 80 of the specialist vessels were ordered in 2023, according to shipbroking giant Clarkson, worth a combined $8.1bn (£6.4bn).

The purchases were driven by demand for shipping capacity from China, which overtook Japan to become the world’s biggest exporter of cars last year.

In particular, Chinese EV manufacturers including BYD, Volvo-parent Geely and SAIC Motor, the owner of MG, have been seeking increased capacity to send more cars to Europe, even buying their own car carrier fleets in the process.

Aggressive expansion into Europe has been triggered by price wars among Chinese EV makers, as they look to sell cars abroad in search of larger profits.

According to Clarksons, there are now 769 car carriers in operation worldwide, with the largest able to carry nearly 8,000 vehicles.

Some 200 more are being built. But they typically take around four years to construct, leaving the likes of BYD, SAIC and Geely scrambling for capacity in the meantime.

BYD has ordered eight car carriers, with the first – known as the BYD Explorer – having recently entered service.

The vessel sailed from Shenzhen and arrived at a port in the Netherlands late last month loaded with 5,000 cars, destined for forecourts across Europe.

Another vessel owned by rival SAIC, called the SAIC Anji Sincerity, is the largest of its kind with a capacity of 7,600 cars.

The arrival of thousands of Chinese cars on European shores is sending shockwaves through the industry, with European rivals including Renault warning of a pending “invasion”.

One in three electric cars sold in Britain last year were manufactured in China, according to the Society of Motor Manufacturers and Traders.

That figure includes Western companies such as Tesla and BMW, which import cars from their factories in China.

Chinese companies have a market share of about 10pc in the UK but many are looking to aggressively expand their customer base.

This includes BYD, which is set to launch cars including the low-priced Dolphin, and MG – which is rolling out its Cyberster sports car.

However, Chinese manufacturers’ expansion abroad has sparked national security concerns in the West, as noted by President Biden earlier this month.

In a statement, he said: “China is determined to dominate the future of the auto market, including by using unfair practices.

“China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”

Meanwhile, in terms of the tankers being purchased, Andi Case, chief executive of Clarksons, said many of the ships are “dual fuel”, meaning they can run on liquified natural gas (LNG) or potentially greener fuels such as ammonia.

This allows car manufacturers to reduce the carbon emissions of their supply chains.

He said: “Car manufacturers have to go through every supply chain and understand the carbon score, so that’s one of the reasons why there is this massive order book.”

Several “roll-on, roll-off” car transporters were scrapped during the pandemic, as many auto factories temporarily shut down and demand evaporated overnight.

Shipyards subsequently failed to recover quickly enough to replace them as demand returned post-Covid, which has since led to a backlog of orders.