Electric Vehicles

EU Dashes China’s Hopes of Market Domination
Chinese OEM Nio is one of many homegrown EV manufacturers trying to break into Europe's vehicle market.

EU Dashes China’s Hopes of Market Domination

By Simon Johns - Jun 13, 2024

The European Union tried to stanch the flow of affordable Chinese electric vehicles by slapping on substantial tariffs that it believes will protect the bloc’s automotive industry and its 13 million workforce.

China is Europe’s biggest trading partner and in 2023 sold almost U.S.$11 billion-worth of EVs to Europeans. Chinese cars are up against some of the biggest and most well-established cars companies in the world, such as VW Group, BMW and Stellantis.

The tariffs follow an EU investigation into China’s automakers launched in October. It considers favorable government loans to be subsidies, which disadvantages European carmakers and makes production of unfairly cheap. Some believe that intense competition in China’s EV market led to innovation that has driven down costs. Europe’s car companies struggle to compete with those costs.

Tariff rates were set depending on whether companies cooperated with the EU’s probe. BYD, the world’s largest EV maker, and Geely will face tariffs between 17% and 20%. At the upper end, state-owned SAIC will get 38% for not playing ball. This is in addition to the 10% already in place. European marques that produce in China and export to Europe will pay 21%.

China’s commerce ministry called the measure an “ill-informed and lawless” act of protectionism.

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