Beijing, China – The recent decision by the European Union to impose additional tariffs on Chinese electric vehicle (EV) manufacturers has sent shockwaves through the industry. The move comes after a probe initiated by the EU in October, targeting Chinese EV players who have a large presence in Europe. Among the companies affected are BYD, Geely, and SAIC, with additional duties ranging from 17.4% to 38.1%.
Analysts have noted that the EU tariffs, while impactful for the EV sector, are not expected to derail China’s ongoing recovery in the industry. Vincent Sun, an equity analyst at Morningstar, commented that the punitive tariffs are moderate compared to the US tariffs on Chinese EV imports. The European Commission cited “unfair subsidization” for Chinese EV makers as a reason for the tariffs, pointing to the threat of economic injury to the EU’s own EV industry.
China has reacted strongly to the EU’s decision, labeling it as “blatant protectionism” that will create trade frictions. The Ministry of Commerce expressed deep concern and dissatisfaction with the move, stating that it disrupts the global EV market. The EU seems to be signaling to Chinese companies, particularly state-backed SAIC, to establish production facilities within Europe to avoid tariffs.
Moving forward, Chinese EV manufacturers who cooperated in the investigation but were not sampled will face 21% in extra tariffs, while non-cooperative companies will be subject to 38.1% in additional duties. Establishing local factories in Europe has been suggested as a long-term solution for Chinese manufacturers to navigate the global auto market effectively.
In response to the tariffs, BYD has committed to building a new EV plant in Hungary, while Geely has started transitioning production of some vehicles from China to Belgium. The OEMs have recognized the need for overseas expansion to stay competitive in the ever-evolving auto industry.
Overall, the imposition of tariffs by the EU on Chinese EV manufacturers reflects the growing complexity of international trade dynamics in the EV sector. As the industry continues to evolve, companies are looking for ways to adapt and thrive in a highly competitive market.