Lisbon, Portugal – The European Union has taken action to protect its motor industry by imposing higher tariffs on Chinese electric vehicles. The move, affecting individual manufacturers with rates ranging from 17.4% to 37.6%, is in addition to the existing 10% duty on all electric cars imported from China.
These new tariffs could potentially increase the prices of electric vehicles across the EU, making them less accessible to European consumers. The decision by Brussels is seen as a response to what the EU deems as unfair subsidization allowing China-made EVs to be sold at much lower prices than those produced within the bloc.
The tariffs are set to come into effect on Friday, pending the outcome of an investigation into allegations of Chinese state support for the country’s EV makers. This move is expected to have significant implications for both Chinese and Western car manufacturers operating in China.
Companies like SAIC, BYD, and Geely will be subject to individual duties based on their level of cooperation with the investigation. For instance, SAIC faces the highest new tariff of 37.6%, affecting its global revenues from EV sales in Europe. On the other hand, BYD will see an extra duty of 17.4%, potentially giving the automaker an advantage in the European market.
Chinese EV firms are already planning to localize production in the EU to mitigate the impact of the new tariffs. BYD is progressing with its first European factory in Hungary, while Chery has signed a joint-venture deal with a Spanish firm to produce EVs in Barcelona. SAIC is also exploring the establishment of its first factory in Europe.
The EU’s decision to increase tariffs on Chinese EVs is seen as a strategy to reduce the influx of Chinese-made vehicles into the region and promote investment in local manufacturing. This move poses challenges for China’s booming EV industry, which heavily relies on exports to offset domestic market challenges.
Despite China’s efforts to boost its EV sector as part of its economic growth strategy, the imposition of tariffs by major markets like the EU and the US could exacerbate trade tensions with key trading partners. The EU’s move highlights the ongoing trade disputes in the evolving landscape of the global automotive industry.