The European Union announced on Wednesday that it would be imposing additional tariffs of up to 38 percent on electric cars built in China. This decision is aimed at leveling the playing field for automakers in Europe, but it has sparked a debate among industry experts.
While some European automakers argue that these tariffs could lead to a trade war, others believe that they will not be enough to curb China’s dominance in the industry. Instead, they suggest that incentives to make low-emission cars more appealing to consumers are needed to achieve the EU’s goal of banning the sale of new internal combustion engine vehicles by 2035.
The increased duties on electric vehicles from China are expected to impact consumers by raising the prices of the most affordable electric cars on the market. The European Union’s investigation revealed that Chinese electric car manufacturers benefit from government subsidies throughout the supply chain, giving them a competitive edge over their European counterparts.
European automakers, who are heavily dependent on the Chinese market for both exports and production, have expressed concerns about the new tariffs. BMW’s chief executive, Oliver Zipse, criticized the decision, stating that it harms European companies and interests. Some manufacturers are exploring collaborations with Chinese companies to circumvent the tariffs.
The European Union’s move follows a similar decision by the United States to impose 100 percent tariffs on Chinese electric vehicles. The EU began investigating Chinese EV subsidies in October, citing unfair competition from leading Chinese electric car makers.
The EU’s decision is seen as a way to prevent a repeat of the solar energy industry situation in the late 2000s, where Chinese investments led to the collapse of European and American companies. The impact of these tariffs on the Chinese electric vehicle market in Europe remains to be seen, but some companies are already feeling the effects.
As demand for Chinese EVs in Europe slows down and uncertainties in the market increase, companies like Great Wall Motors are closing headquarters in Europe. However, BYD, China’s leading electric car manufacturer, remains focused on Europe and is expanding its presence in the region.
Overall, the imposition of tariffs on Chinese electric cars by the European Union is a significant development that could have far-reaching implications for the global automotive industry.
