The EU today confirmed huge new tariffs for Electric vehicles imported from China.
From Friday, provisional taxes of between 17.4 and 37.6 percent will be levied on vehicles.
The lowest tariff rate applies to BYD, a carmaker based in Shenzhen. Geely, which owns Volvo, Polestar and Lotus, has to pay tariffs of 19.9 percent. SAIC, a Chinese state-owned carmaker, has to pay the highest tariff of 37.6 percent.
other companies New tariffs of 20.8% (the weighted average) apply.
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These fees are in addition to the existing 10% taxes. As a result, prices for electric vehicles in Europe could rise.
Beijing could also take retaliatory measures. However, the EU argues that intervention is essential.
Why is the EU imposing new tariffs?
The charges are an attempt to protect the EU automotive industry. Beijing is accused of “illegal subsidies” Chinese manufacturer of electric vehicles.
In October last year, the EU launched an investigation into The reason.
“The electric vehicle sector has enormous potential for Europe’s future competitiveness and its leadership role in green industry,” said Ursula von der Leyen, President of the European Commission, at the opening of the inquiry.
“European car manufacturers and related industries are already investing and innovating to fully exploit this potential. Wherever we find evidence that their efforts are being hampered by market distortions and unfair competition, we will take decisive action.”
The EU has now concluded that the subsidies are indeed unfair. With the state support, Chinese electric car manufacturers are accused of artificially lowering prices.
According to Brussels, this threatens to cause “economic damage” to the bloc’s car manufacturers. However, not everyone in the EU supports these fees.
Reactions in the EU
Government officials and automakers have raised numerous objections to the tariffs.
Sweden's Prime Minister fears that the tariffs will escalate “a larger trade war.” The German Chancellor warned that the measures would also harm EU companies that import electric vehicles from China.
Hungary, which has built a strong trade partnership with Beijing, has issued stronger rebukes. “We do not agree with the brutal European punishment of Chinese electric car manufacturers with punitive tariffs,” the country's economy ministry said last month. “Protectionism is not the solution.”
Another critic is the German car giant Volkswagen. “The negative effects of this decision outweigh any benefits for the European and especially the German automotive industry,” a company spokesman said today.
Industry analysts also questioned the EU’s plans. James Edmondson, an EV expert at market research firm IDTechEx, fears the plan could backfire.
“The long-term impact of restricting trade with China in general could be detrimental to EU manufacturers and the adoption of electric vehicles, particularly as the EU is still so dependent on China for components such as batteries for electric vehicles,” he told TNW last month.
Negotiations continue
The EU inevitably played down the concerns. EU Trade Commissioner Valdis Dombrovskis said talks with Beijing could still lead to a mutually beneficial outcome.
“Our goal is to ensure fair competition and a level playing field,” Dombrovskis told Bloomberg News today. “That's why we see no reason for retaliation this time either.”
“These talks with China are ongoing and if a mutually beneficial solution does emerge, we can also find ways to ultimately not apply the tariffs.”
