According to the Rhodium research group, the European market has become unattractive for Chinese exporters of electric vehicles, tariffs have to be as high as 50 percent In some cases, such as BYD, tariffs should be even higher, according to Rhodium.
Meanwhile, in the latest tariff revisions at the end of August, BYD, the Chinese auto giant, saw its tariffs cut from 17.4 percent to 17 percent, Geely from 19.9 percent to 19.3 percent, and SAIC from 37.6 percent to 36.3 percent, CNBC recalls.
The current tariffs will not act as a significant deterrent to Chinese electric vehicle makers, Joseph McCabe, president and CEO of global research firm AutoForecast Solutions, told CNBC.Tariffs on Chinese electric vehicles will be a hurdle, but not a barrier to entry”McCabe added.
EU’s soft stance
Meanwhile, Bloomberg reported that the European Union and China will continue negotiations to finding an alternative solution for tariffseven if member states vote in the coming days to impose fees on electric vehicles. Bloomberg sources said a provision allowing talks to continue would be added to the draft legislation, which member states are now set to vote on early next month.
The EU said both sides were considering creating a mechanism that would allow for price and export volume control in order to avoid anti-subsidy duties – Bloomberg reported.
This EU attitude is diametrically opposed to the tough decisions taken by North American countries. In May this year The United States has announced a 100 percent tariff on Chinese electric vehicles. Canada followed suit last month..
What is the reason for the EU’s soft stance? McCabe pointed out that the European community’s tariffs were not as harsh as those announced by North America because European and Chinese producers are closely linked.
Chinese electric cars are getting cheaper
As CNBC notes, Chinese electric vehicle makers are coming out with new, cheaper offerings even as the EU tries to restrict imports through tariffs.
The ineffectiveness of tariffs is perfectly illustrated by the example of BYD. At a conference in May this year, the Chinese giant announced that its The Dolphin model will hit the European market for less than $21,550. This model is a rebranding of the Chinese Seagull model.
For comparison, Western electric vehicle manufacturer Tesla’s Model 3, the brand’s cheapest offering, sells in the UK for $44,480. Electric vehicles manufactured by Tesla in China also face a 9% tariff on imports into the EU.
Even with a 17% target, BYD’s Dolphin will still be about $23,270 cheaper than a Tesla Model 3 imported from China.
In the electric car sector, however, European competition is lagging far behind. To better compete with fierce Chinese rivals, German brand Volkswagen has announced plans to develop a low-cost electric vehicle for the European market. Its price is around $21,476. However, this cheap car is not expected to enter the market until 2027.
