The trade war over EVs with China has continued across the globe with the EU making some concessions but the US locking in its huge tariffs.
In Australia, new Chinese brands continue to arrive in anticipation of the New Vehicle Efficiency Scheme that seeks to increase the range of low emissions vehicles available and could well change the nature of the overall car parc..
The last tariff here of five percent was abolished in 2022 and now, zero and low emission cars, below the luxury car tax threshold for fuel efficient vehicles, will be exempt from import tariffs and fringe benefits tax.
Chinese cars, including Tesla are now the third largest country of origin for new vehicles in Australia.
US goes hard on imports
Meanwhile Reuters reported the Biden administration in the US has locked in a 100 per cent duty on electric vehicles, to protect its strategic industries from what it says are China’s state-driven industrial practices.
The on Chinese EVs, and other tariffs including 50 per cent on solar cells and 25 per cent on steel, aluminium, EV batteries and key minerals, would take effect on Sept. 27.
EU concessions
At the same time the EU will lower proposed final tariffs on Tesla and trim rates for other electric vehicles from China after taking into account submissions by the companies, a source told Reuters.
Tesla’s proposed tariff rate will drop to 7.8 per cent, from 9 per cent, the source was reported to say. BYD, there was no change to its 17 per cent tariff. For Geely, the new rate would be 18.8 per cent from a previous 19.3 per cent.
The peak rate of 35.3 per cent would apply to SAIC and other companies not cooperating with EU investigation, the source said.
These tariffs are on top of the EU’s standard 10 per cent import duty for cars.
China responded by saying the EU was obstructing open dialogue on the issue
“The European Commission ignored the sincerity and efforts of the Chinese industry and put forward a proposal for a flexible solution that it intends to reject the Chinese industry without in-depth communication, which is deeply disappointing,” a Commerce ministry spokesperson said.
Last month, the EU set out its initial proposal for final duties with the higher duties to all cooperating companies – now set at 20.7 per cent.