EU could scrap Chinese EV tariffs in favour of minimum prices

The European Union is considering scrapping its large tariffs on Chinese-made electric cars in favour of a new minimum pricing strategy. Last year it imposed rates of up to 45% on Chinese manufacturers’ electric vehicles after the European Commission found China's car industry benefited from “unfair subsidisation”. MG owner SAIC was hit with the highest tariff (35.3%, in addition to the standard 10% import duty) while BYD was charged an extra 17.4% and Geely (owner of Volvo, Lotus and Polestar) incurred a 19.9% rate. Plug-in hybrids are exempt. The European Commission justified the tariffs by stating that the arrival of cheap electric cars made in China – undercutting those from European marques – could “cause a threat of economic injury to EU BEV producers”. For example, the two cheapest electric cars sold in the UK, the Dacia Spring and Leapmotor T03, are both manufactured in China. Diplomats from China and the EU will now negotiate the mooted minimum pricing, although European trade commissioner Maros Sefcovic has previously said any such policy would need to be as effective as tariffs. Any such policy would be likely to protect European makers’ models such as the Renault 5 and the upcoming Volkswagen ID 2 (both priced around €25,000), but not higher-end models like the Audi Q6 E-tron (from around €60,000). The news comes after the tariffs attracted criticism from much of the European car industry. Wayne Griffiths, talking as chief executive of Spanish manufacturer Seat-Cupra before his recent departure from the role, told Autocar the firm could be forced to “start firing people” because of losses incurred by the extra 20.7% duty applied to the Chinese-made Cupra Tavascan. This could also force the end of production of the Seat Arona and Seat Ibiza small cars, Griffiths said. “This puts us potentially in a position where we will have to start firing people. We’re paying the tariff at the moment instead of the customer and we can’t continue doing that,” he said. Griffiths added: “Now we try to find a solution in a complicated legislation framework, because this thing affects everybody and all manufacturers. So that's what we're struggling with at the moment. And there are different mechanisms that you can use to try and get to a better solution.” He referenced Tesla, which managed to bring tariffs down on its China-made EV to 7.8%. Moreover, Skoda sales and marketing boss Martin Jahn last year told Autocar that the tariffs would have “no effect” on slowing the rise of Chinese EVs. He called on the EU to instead follow China’s example in investing in its native car firms, rather than introducing punitive charges. Jahn said: “The Chinese have provided very strong support to [their] automotive industry over the last 15-20 years, and I lived in China myself for four years, so I've seen that – and it's working. “If Europe wants to go electric or CO2-neutral, it should support its [automotive] industry. It's much better to support the industry to be competitive, to have great products, and then compete on the market with the Chinese.” A number of Chinese manufacturers have also set in motion plans to open factories in Europe. BYD has confirmed it will build a plant in Szeged, Hungary – although this is currently under investigation by the EU for what it claims is unfair subsidisation from Chinese authorities. Meanwhile, Austrian contract manufacturer Magna Steyr confirmed it will build GAC and Xpeng models using semi-knock-down kits (SKDs), essentially completing the assembly of part-finished vehicles imported from overseas. And Leapmotor has been building its T03 city car in the former Fiat plant in Tychy, Poland. However, reports this week suggest production has been paused after the French government removed the T03 from its purchase subsidy scheme, because it is assembled from SKDs so did not meet requirements for local content.

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EU could scrap Chinese EV tariffs in favour of minimum prices

European Union last year imposed tariffs of up to 45% on Chinese-made electric vehicles

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EU could scrap Chinese EV tariffs in favour of minimum prices

European Union last year imposed tariffs of up to 45% on Chinese-made electric vehicles

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Latest car reviews

Top manufacturers

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Legal bits

About Autocar