EU Imposes Increased Tariffs on Chinese EVs

The European Commission has revealed plans to implement additional tariffs of up to 38.1% on Chinese electric vehicles (EVs) imported into the European Union starting in July.

The European Commission aims to counter what it perceives as excessive subsidies provided to Chinese EV manufacturers.

The new tariffs will range from 17.4% on vehicles from BYD to 38.1% on those from SAIC, in addition to the standard 10% import duty already in place.

This decision comes on the heels of the United States announcing it would increase tariffs on Chinese EVs to 100%.

European automakers are grappling with the influx of low-cost EVs from Chinese competitors. 

The Commission estimates that Chinese EVs now hold an 8% share of the EU market, up from less than 1% in 2019, and this share could rise to 15% by 2025.

These vehicles are typically priced around 20% lower than their European-made counterparts.

European policymakers are keen to avoid a repeat of the solar panel industry scenario from a decade ago, where insufficient measures against Chinese imports led to the collapse of numerous European manufacturers.

To prevent similar outcomes, the EU began investigating the subsidies granted to Chinese EV makers in October.

Shares of major European automakers, many of which derive significant revenue from the Chinese market, have declined due to concerns over potential retaliatory measures from China. 

Companies like BMW, which manufactures EVs in China for sale in Europe, are particularly vulnerable to these new tariffs.

Chinese Foreign Ministry spokesperson Lin Jian criticized the EU's investigation as a "classic case of protectionism," warning that the tariffs would harm economic cooperation between China and the EU, disrupt the automotive market, and destabilize global supply chains.

Beijing has promised to take all necessary measures to safeguard its legitimate rights and interests.