NewsEU tariffs squeeze sales of Chinese electric cars

EU tariffs squeeze sales of Chinese electric cars

The European Union increased tariffs on Chinese electric cars, which caused a drop in sales in November. Chinese manufacturers such as BYD and SAIC Motor reported their lowest results since March.

EU tariffs on Chinese electric vehicles. Effects already visible.
EU tariffs on Chinese electric vehicles. Effects already visible.
Images source: © Getty Images | 2024 Getty Images

At the end of October, the European Union decided to raise import tariffs on electric cars from China. This decision impacted the sales figures of Chinese manufacturers in November, marking the lowest sales in eight months. Companies like BYD and SAIC Motor, owner of the MG brand, experienced a market share drop to 7.4% compared to 8.2% in October.

The European Union imposed import tariffs on Chinese electric cars to protect its producers from subsidised competition from China. The new tariffs, up to 35.3%, prompted Chinese manufacturers to file a complaint with the World Trade Organization, accusing the Union of unfair practices.

The Union imposes tariffs, China responds

The new tariffs, which range from 7.8% to 35.3%, were imposed in response to China's subsidising production, allowing for selling cars at reduced prices. The tariff rates depend on the degree of subsidisation and cooperation with the European Commission. In response to these actions, China launched its own investigation into European products such as dairy and pork.

The increased tariffs may cause more losses than benefits to Europe. While they are intended to protect the local industry, Europe imports nearly half of Chinese electric vehicles, which could impede achieving ambitious climate goals. This challenges countries where the electric car market is still developing, and the infrastructure is inadequate.

Despite the implementation of higher tariffs, Europe remains a key market for Chinese electric cars, constituting about 40% of China's exports. The EU's decisions aim to protect European producers from unfair competition from Chinese companies.

Beijing reacted swiftly and decisively to Brussels' decisions. China, perceiving the new tariffs as an act of provocation, responded with anti-dumping proceedings against European products, which could further escalate the trade conflict.

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