Latest News

Car makers respond to European tariffs

Chinese car manufacturer's have responded to EU's tariffs on Chinese electric vehicles, as negotiations between government officials continue. 

Chinese car manufacturer’s have responded to the European Union’s tariffs on Chinese electric vehicles, as negotiations between government officials continue.

The tariff of up to 37.6 per cent on imported electric vehicles to Europe is in addition to the existing 10 per cent import duty.

The European Union imposed the tax on vehicles from China in response to a flood of cheap electric cars manufactured with subsidies provided by the Chinese government.

READ MORE: Europe announces tariffs for Chinese electric cars

The additional import tax is currently being treated as provisional for a four-month period while negotiations between government officials and stakeholders continue.

Car manufacturers, like Tesla, spoke with Reuters about the impact of the tariffs on the pricing of their vehicles.

Response from car manufacturers

Tesla is the largest importer of electric cars from China to Europe, and according to Reuters, Tesla will be forced to increase the price of the Model 3 due to the new tariff.

SAIC Motor – the Chinese state-owned parent company of nine car brands – says it will request a hearing with the European Commission. According to Reuters, the SAIC Motor claims the government body “overlooked some of the information and counter-arguments submitted by SAIC during the investigation.”

On top of the current 10 per cent import duty, BYD will be hit with an additional 17.4 per cent tariff. However, BYD has plans to build a factory in Hungary, with a second plant reportedly planned in Turkey.

Polestar, owned by Chinese car giant Geely – told Reuters it would take “mitigating measures” to offset the tariffs, such as reducing supply-chain costs.

BMW, which manufactures its electric Mini in China, and is facing a 20.8 per cent tariff, has come out against the import tax.

BMW CEO Oliver Zipse argued that the tariffs do not strengthen the competitiveness of European manufacturers.

“On the contrary; it not only harms the business model of globally active companies, it also limits the supply of electric cars to European customers and can therefore even slow down decarbonisation in the transport sector,” Zipse says.

“Such measures heavily infringe the principle of free trade, which is also propagated by the [European Union].”

Car companies that cooperate with the European Commission in the lead up to the tariff announcement receive lower tax rates, while those that declined to cooperate are being taxed at the full 37.6 per cent.

The Chinese Government has said it will take “all necessary measures” to protect the country’s interest. These measures could include retaliatory import taxes on European-made items such as liquor and pork.

Send this to a friend