The new tariffs are atop the EU’s standard 10% duty on Chinese EV imports|iMoD Official|CC BY 3.0
The European Union is imposing additional tariffs of up to 38.1% on Chinese electric vehicle imports in a bid to prevent cheap Chinese EVs from flooding the market.
The move comes after an EU probe found EV makers in China enjoy “unfair subsidization” from China, which allows them to sell cars for a lesser price than EVs manufactured in Europe.
The US made a similar move last month when it imposed a 100% tariff on Chinese EVs.
The EU import tariffs are atop the standard 10% duty on imported electric vehicles.
So far, Chinese EVs with a large footprint in Europe are the most affected. The highest is over 38% for the Chinese state-backed SAIC, 20% for Geely (which owns Volvo), and 17.4% for BYD, which is leading the EV industry in sales.
Beijing criticized the move and vowed to retaliate, something that European carmakers, including Volkswagen and Mercedes-Benz, are worried about as they rely on China for auto sales.
The EU tariffs are set to start from July 4 if no measures with China are reached.
What’s the solution?
Analysts suggest that setting up local factories in Europe, as BYD and Geely have begun to do in Hungary and Belgium, could be a long-term solution for Chinese EV makers.
Following the news, share prices of some of these EV companies rose on Thursday. BYD gained 8%, Geely rose about 4%, while Nio and Li Auto saw increases of 1.75% and 2.67% respectively. In contrast, SAIC fell by more than 2%.