The European Union has raised tariffs on Chinese-made electric cars to protect the Brussels-based auto industry. The new tariffs on individual manufacturers will range from 17.4% to 37.6% on top of the 10% tariff already applied to all electric cars imported from China. This could raise the price of electric cars across the EU and make them less affordable for European consumers.
The move is also a major blow to the Chinese government, which is already embroiled in a trade war with the United States. The EU is the largest overseas market for China’s electric car industry, and the country is relying on high-tech products to revive its ailing economy.
EU officials claim the import surge was fueled by “unfair subsidies” that allowed Chinese-made electric cars to be sold at much cheaper prices than those produced within the bloc. China has rejected repeated accusations from the U.S. and the EU that it is subsidizing overproduction to flood Western markets with cheap imports. The new charges take effect on Friday, but are only temporary while an investigation into the Chinese government’s support for the country’s electric car makers continues.
They are not due to be imposed until later this year. So who are the potential winners and losers in this trade dispute? Chinese brands are not the only ones affected by the measures. Western companies that manufacture cars in China are also in Brussels’ target.
By imposing the tariffs, Brussels said it was trying to correct what it sees as a distorted market. While the EU’s decision may seem innocuous compared to the recent US move to raise overall tariffs to 100%, it could have far more serious consequences.
Chinese electric cars are relatively rare on US roads, but are far more common in the EU. According to statistics from Transport and Environment (T&E), an influential environmental group based in Brussels, the number of electric cars sold by Chinese brands across the EU rose from just 0.4% of the total EV market in 2019 to nearly 8% last year.
Patrick Krupkala, an architect from Poland who will take delivery of his brand new Chinese-made MG4 in two weeks, told the KVR: “It’s a really fast car, and it’s rear-wheel drive, just like my previous car, the BMW E46.” T&E project companies such as BYD and Shanghai Automotive Industry Corporation (SAIC), the Chinese owner of the former British brand MG, could reach a 20% market share by 2027. But not all electric cars made in China will be affected equally by the new tariffs.
