The European Union on Thursday confirmed its decision to raise tariffs on electric vehicles imported from China – with one carmaker issuing fresh warnings that it may have to raise prices as a result.
The European Commission, the European Union’s executive arm, announced plans for such levies in June after an investigation concluded that electric battery producers in China were benefiting from “unfair” subsidies.
On Thursday, European regulators confirmed that those tariffs, which have been slightly modified to range from 17.4% to 37.6%, will take effect on Friday. The levies will affect automakers from Chinese giant BYD to potentially European brands that make cars in China and even the American giant Teslawhich has a factory in Shanghai.
The EU’s decision comes at a time when Chinese automakers are aggressively expanding into Europe with competitively priced offerings, posing a threat to the region’s top automakers, many of which have lagged behind in EVs. The European Commission says these carmakers benefited from “unfair subsidies”.
Automakers have already responded to the tariffs.
On Thursday, a Chinese EV maker Neo it said it was currently maintaining prices for its cars sold in Europe, but added that “it cannot be ruled out that prices may be adjusted at a later stage as a result of the imposition of these tariffs”.
A representative of another Chinese electric car, Xpeng said on Thursday that customers waiting for car deliveries or those placing new orders before the tariffs take effect will be “protected from any price increases”.
He did not comment on whether it would end up raising prices as a result of the levies.
Geely declined to comment when contacted by CNBC.
When the EU first announced the tariffs last month, Tesla said it would likely raise prices of its Model 3 vehicle in Europe. The EU has yet to say what specific level of tariffs Tesla will face, but noted last month that the US carmaker “may receive an individually calculated rate of duty”.
China-EU negotiations
The tariffs that take effect on Friday are temporary and last for four months. During this time, EU member states must vote on so-called “definitive tariffs”, which will last for five years.
Chinese and EU officials have held several rounds of meetings to discuss the tariffs, with Beijing in June criticized the EU’s imposition of tariffs as an “act of protectionism”.
Chinese Commerce Ministry spokesman He Yadong said Thursday that he hoped the two sides would “meet halfway, show sincerity, speed up the consultation process and, based on rules and reality, reach a mutually acceptable solution as soon as possible. .”
Chinese EV maker bound for Europe
Chinese EV manufacturers have reiterated their commitment to the European market, where they have been expanding in recent years.
Xpeng said it is “committed to providing high-quality, innovative products to its ever-growing European customer base and making long-term commitments in these markets.”
The company added that it is “actively evaluating the feasibility of establishing local production capabilities in Europe.” Xpeng currently manufactures all of its cars in China. A European factory could help offset some of the tariffs.
BYD – one of China’s and the world’s biggest electric vehicle makers – said last year it planned to open its first European factory in Hungary, without specifying a timetable.
Meanwhile, Nio said on Thursday it was “fully committed to the European market: we believe in enhancing competition and consumer interest and hope to reach a solution with the EU before final measures are imposed in November 2024.”
