- The European Union has been mulling tariff charges on Chinese EVs being imported into Europe for weeks.
The European Union (EU) has reportedly hit China-made electric vehicles (EVs) being imported into Europe with tariffs as high as 38.1 per cent in a move that is expected to invite a sharp retaliation from Beijing. The move from EU comes in the wake of the US under Joe-Biden administration increasing import duty on various China-made products, including EVs.
Bloomberg reports that the EU has formally notified a number of Chinese EV companies doing business in Europe about the tariff imposition. The tariff imposed varies from company to company. The duty on BYD electric cars would be 17.4 per cent, 20 per cent on Geely electric car and 38.1 per cent on SAIC models. These would be implemented from July 4 onwards.
The move from EU comes after several weeks of investigation into subsidies reportedly enjoyed by Chinese EV companies from the Chinese government. This, it is said, allows Chinese EV brands to keep costs in check and then offer their products in Europe at prices that are far more competitive than price stickers on comparable electric models from local European brands.
While European Commission President Ursula von der Leyen has gone on record to say she fears Chinese EVs will flood European markets, China has already warned of retaliatory measures which could see Beijing imposing tariffs on products imported from Europe.
Game of Tariffs
The concern in Europe is largely about protecting the local automotive industries against a rush of Chinese EV brands that are not just offering products at compelling price points but products that are relatively robust and loaded with features. Many argue that it is not possible for European brands to compete on pricing against their Chinese rivals.
But a higher tariff is also likely to impact non-Chinese brands like Tesla which builds EVs in China for exports to Europe. And others like Mercedes and Volkswagen fear that China’s retaliation could impact its business in the Asian market, the biggest automobile market anywhere in the world. Many European brands in the past have reported that up to 30 per cent of their global sales come from China alone.
While China accuses tariffs as barriers to free and open trade, many western manufacturers have also been warning against EU imposing duty because of fears over a Chinese retaliation.
First Published Date: 12 Jun 2024, 16:10 PM IST