European Union aims to crack down on cheap Chinese EVs with steep tariffs

[zohaibahd]

What just happened? Those ultra-affordable Chinese EVs crowding lots across the European Union may soon be much harder to find at bargain prices. The EU has just greenlit hefty new tariffs aimed at slowing down cheap imports from China.

In a move sure to rile up Beijing, the European Commission has announced that it will impose provisional anti-subsidy duties ranging from 17 percent to 38 percent on Chinese electric cars starting next month. The new tariffs will be added on top of the existing 10 percent duty. This means that by next month, popular affordable Chinese models could see their prices in Europe increase by almost 50 percent.

Giants like BYD, the world's top-selling EV brand, and Geely will face additional tariffs of 17 percent to 20 percent on individual car models. Meanwhile, European automakers exporting EVs made in China, such as Mercedes and Renault, will pay a flat 21 percent rate.

Chinese companies like state-owned SAIC, which did not cooperate with the EU's probe into subsidies in the EV sector, will face the maximum 38 percent tariff rate. SAIC's affordable MG brand has dominated the lower end of the European EV market.

While significant, the tariffs are still dwarfed by those announced by the US. In May, President Biden said duties on Chinese EVs would increase to 100 percent.

The crackdown on affordable EVs is driven by claims that Chinese automakers have benefited from unfair subsidies from their government, allowing them to sell vehicles at artificially low prices in Europe. France has been the biggest supporter of these punitive tariffs.

European Commission Vice President Valdis Dombrovskis says he is still open to negotiating with Beijing over the next three weeks before the provisional duties are locked in on July 4. However, China has already fired back, condemning the "ill-informed and lawless" move as a "naked protectionist act."

Beijing warned it will "take all necessary measures" to defend Chinese companies' rights and interests. The tariffs could generate billions annually for EU coffers as Chinese EV sales in the region continue to surge.

Automakers may have some flexibility to maintain profits despite the tariffs. A Bloomberg report indicates that many Chinese EVs fetch roughly double the price in Europe compared to their home market, giving automakers a cushion to partially absorb EU duties.

Additionally, automakers could shift more production directly to Europe to bypass the tariffs, or pivot their sales efforts to other emerging EV markets like the Middle East and Latin America.

Following news that the tariffs are manageable, BYD shares jumped as much as 8.8 percent in Hong Kong trading on Thursday.

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European Union aims to crack down on cheap Chinese EVs with steep tariffs

 

[yRaz]

'Noone is buying EVs because they're too expensive"
"You aren't allowed to sell cheap EVs here!"

 

[dangh]

'Noone is buying EVs because they're too expensive"
"You aren't allowed to sell cheap EVs here!"

You aren't allowed government subsided ev here as they are strongly anticompetitive and it's Chinese attempt to hinder West car companies and create a monopoly.

 

[yRaz]

You aren't allowed government subsided ev here as they are strongly anticompetitive and it's Chinese attempt to hinder West car companies and create a monopoly.

Maybe the EU could offer subsidies on EVs to make them cheaper? Goodness knows, everyone has billions to send around the world but never has money to solve problems at home.

 

[Achaios]

Red China intended to eliminate German & French auto industry, the heart of the EU.

I am surprised that it has taken the EU so long to strike back at Red China and that the proposed tariffs are so low.

The Americans are hitting them hard and they should IMO.

 

[opckieran]

Maybe the EU could offer subsidies on EVs to make them cheaper? Goodness knows, everyone has billions to send around the world but never has money to solve problems at home.

The problem is, at least in America, dealers and manufacturers will quickly raise prices on tax credits (basically the same as subsidies) to eliminate the benefit to the consumer… something about “perceived brand value” or fiduciary responsibility…



I’d rather end subsidies and credits for vehicles (mainly purchased by those in the top 5% of earners I might add) and start charging penalties through insurance for oversized vehicles…

 

[dangh]

Maybe the EU could offer subsidies on EVs to make them cheaper? Goodness knows, everyone has billions to send around the world but never has money to solve problems at home.

No. Subsidies are coming from tax payers money. I do not want to pay for car producers corporations. I'm fine either education, military, health or infrastructure, but if China wants to undercut other countries private company by subsidise their production and ensure their car companies pay crap money to Chinese workers in more than happy to have eu protecting the market without making citizens poorer.
That is best way to solve problem at home.

 

[Shaitan]

Normally, I'd applaud this.
but hey, let's consider the following:
BMW, Mercedes, VW and EVERY SINGLE ONE of these greedy f..ers just OUTSOURCE EVERYTHING THEY CAN to China.
And then, BOOM, the price for the new vehicle you got for less than 20k Euros is now 36 (Honda Civic).
Well, in this case: NOT buying anything new.
The European automakers can die in a ditch:
- higher prices
- MUCH lower reliability
- stealing my personal data
- smaller and smaller engines.
Yeah. NO.

 

[BuckarooBonzaii]

Always easier to blame others for their woes. China has always said it want's to be the World economic leader. In general China became the number one manufacturing in the World not by themselves, but by other Countries who allowed their businesses to outsource their manufacturing to China. Governments needs to look at their business model on how to help businesses instead of taxing them to death and causing them to run away to other Countries.

 

[kiwigraeme]

'Noone is buying EVs because they're too expensive"
"You aren't allowed to sell cheap EVs here!"

Cheaper ones are coming. It is undisputed Chinese manufacturers are getting huge subsidies to dump in west.

NZ farmers/growers have been unsubsidised since 1980s, We export huge amounts, we had to remove subsidies to sell to Europe and USA, without tariffs

There are always some backbone help from govts

USA companies get sweet defense contracts. USA had a huge advantage post WW2 due systems and funding put in place to. Some companies became massive, that were quite minor pre WW2

 

[daffy duck]

Look while we all know the Chinese EV industry is heavily subsidised, and they are virtually dumping cars on the global market, at the end of the day the EU cars are overpriced garbage that have plummeted in reliability scores and rather than even try and compete on price and quality they want the EU to price the competition out of the market so they can keep selling their overpriced trash. When a basic BMW 3 series starts at $100K in my country you know the lunatics are running the asylum. As much as I hate the Chinese government and I know they are trying to destroy the global car market and be the only game in town, the EU needs to be smashed from pillar to post until they stop their delusional arrogance and actually build competitive EV's

 

[whateversa]

China has destroyed countless jobs in my country in many industries with their cheap imports, poor quality and poor labor practices. Countries must protect themselves by adding taxes. Today its hard to find certain products with a reasonable level of quality... its all cheap junk in every shop which rarely last.

 

[mosu]

The solution lies in better build, higher reliability, cost effective products and affordability combined with highly qualified workers and intense automation of product lines, not by protective tariffs.Protectionism is incentive to greed and laziness, not innovation and quality.

 

[hahahanoobs]

When you can't compete - make excuses.

 

[lonetac]

Governments needs to look at their business model on how to help businesses instead of taxing them to death and causing them to run away to other Countries.

Are you referring to the USA? Respectfully, Car manufacturers are extremely profitable. I dont see how anyone can say they are being taxed to death...

Billions in profits. The issue is with a free market that allows business to do what they want in the name of profit. It doesnt matter what anyone does, they will always optimize for profits. I dont see how you can say the car manufactures are being taxed to death when their profits are in the billions.

If I have misunderstood, please feel free to clue me in.

 

[puckle]

Save the planet! Get an EV!*

*Unless it affects our bottom line.

 

[Lounds]

The EU picks and chooses what it wants to add tariffs to to protect industries and jobs. I remember back in 2016 before the Brexit referendum and Chinese steel was absolutely flooding the market bringing the whole sale of steel to an all time low, which is great for building industries but absolutely destroyed the British steel industry... Wasn't a shock that these areas voted in masses to leave the EU.

 

[BuckarooBonzaii]

Are you referring to the USA? Respectfully, Car manufacturers are extremely profitable. I dont see how anyone can say they are being taxed to death...

Billions in profits. The issue is with a free market that allows business to do what they want in the name of profit. It doesnt matter what anyone does, they will always optimize for profits. I dont see how you can say the car manufactures are being taxed to death when their profits are in the billions.

If I have misunderstood, please feel free to clue me in.

I was referring to all businesses in general. Thanks, should have added that in.

 

[Shaitan]

Look while we all know the Chinese EV industry is heavily subsidised, and they are virtually dumping cars on the global market, at the end of the day the EU cars are overpriced garbage that have plummeted in reliability scores and rather than even try and compete on price and quality they want the EU to price the competition out of the market so they can keep selling their overpriced trash. When a basic BMW 3 series starts at $100K in my country you know the lunatics are running the asylum. As much as I hate the Chinese government and I know they are trying to destroy the global car market and be the only game in town, the EU needs to be smashed from pillar to post until they stop their delusional arrogance and actually build competitive EV's

YES, you are 100% correct, but just ONE observation:
NOT only the EV's must be made reliable as they once were.
The ICE cars as well.
the reliability of ALL European manufacturers is at this point ABYSMAL!
Take a look at Toyota, Honda, Hyundai or KIA: While they're not perfect, they're orders of magnitude above anything European!
WHY? Because the f---ng EU leaders don't get involved in the reliability or fair-to-use consumer rights concerning the Automotive, as the money keeps rolling in from the manufacturers.

 

[Wye43]

Excuse me, but isn't that dumb?
Instead of artificially cheeping prices high, how about EU/US come up with their own subsidies to make cheaper EVs?