EU is expected to unveil tariff plans for Chinese EVs this week

TOPSHOT – People look at a BYD Seagull car by Chinese electric vehicle (EV) manufacturer BYD Auto at the Bangkok International Motor Show in Nonthaburi on March 27, 2024. (Photo by Lillian SUWANRUMPHA / AFP) (Photo by LILLIAN SUWANRUMPHA/AFP via Getty Images)

Lillian Suwanrumpha | Afp | Getty Images

The European Union is expected to reveal its tariff rate plan for Chinese electric vehicles this week, as the bloc cracks down on low-priced, subsidized imports.

The EU has a standard 10% duty on imported EVs, but is set to provisionally raise those fees for Chinese EVs starting July 4.

Citi analysts on Monday said the tariff rate could be “hiked to ~25-30% from 10% currently, while our risk scenario (40% probability) envisages a hike in the tariff rate to 30-50%.”

Anthony Sassine, senior investment strategist at KraneShares, on Tuesday said he expects the tariff rates to be “between 10% and 20%” but “could see this being on the higher end of the 20%” after the European Parliament elections last week.

Ursula von der Leyen, president of the European Commission, saw her party – the European People’s Party – gaining seats on Sunday. Von der Leyen has pushed for a “de-risking” approach from Beijing.

Potential EU tariffs on Chinese EVs won't have much impact, strategist says

The European Commission first launched an investigation in October into subsidies given to EV makers in China. The EU alleged such subsidized imports “posed an economic threat to the EU’s EV industry.”

“But the Chinese manufacturers are so efficient, are so ahead of the curve, that tariffs like this – I don’t think will impact too much the pricing here. They will still be more competitive than their EU counterparts,” Sassine told CNBC’s “Squawk Box Asia” on Tuesday.

China’s EV industry has boomed thanks to incentives and support from the Chinese government, raising overcapacity concerns from authorities in the U.S. and Europe.

U.S. Energy Secretary Jennifer Granholm in March warned China could flood the U.S. electric-vehicle market with its offerings, after President Joe Biden raised similar concerns. The U.S. already announced stiff new tariffs in May. The Biden administration hiked tariffs on Chinese EV imports to 100%, up from 25%.

Turkey reportedly announced on June 8 that it will impose an additional 40% tariff on imports of vehicles from China.

Expanding in Europe

Last month, Chinese EV makers including Xpeng and BYD showcased their models in Europe while Nio opened a new showroom in Amsterdam, despite the ongoing EU probe.

BYD announced in December that it will build a new factory in Hungary while Chery in April entered a joint venture with Spain’s Ebro-EV Motors to develop new EVs.

Cedomir Nestorovic, professor of geopolitics at ESSEC Business School, said “scores of Chinese manufacturers are now scouting the EU.”

They “will avoid, or they will try to avoid, all kinds of tariffs,” Nestorovic told CNBC’s “Street Signs Asia” on Monday.

Chinese EV manufacturers are now 'scouting' the EU, professor says

“We’re seeing the Chinese automakers actually setting up factories in Europe. Nio, also, is looking at Hungary. So there are options here, and I’m sure there’s back channels happening here,” said KraneShares’ Sassine.

“I think with Europe, it’s not going to be a big deal. In the U.S., it’s a different story,” said Sassine.

Source link

Related Posts

$1 billion in EV tax credits issued upfront to buyers, say Treasury, IRS

Halfpoint Images | Moment | Getty Images The federal government has issued more than $1 billion in tax credits as an upfront cash incentive to buyers of electric vehicles, the…

Read more

Used EV price crash gets deeper with ‘premium’ brand idea history

A used 2020 Tesla Model 3 is available for sale on a CarMax lot on March 10, 2022 in Burbank, California.  Mario Tama | Getty Images News | Getty Images…

Read more

Cost cuts, China come into focus

Stellantis CEO Carlos Tavares holds a news conference after meeting with unions, in Turin, Italy, March 31, 2022. Massimo Pinca | Reuters DETROIT – Since spearheading a merger to create…

Read more

Tesla could get special duties as part of EU’s higher China EV tariffs

Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of X speaks during the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California,…

Read more

9 stocks that can benefit from Fed interest rate cuts

The S & P 500 and Nasdaq extended their record rallies this week following cooler-than-expected consumer inflation data Wednesday morning. While Fed rate cuts would likely benefit the overall stock…

Read more

Ford ends EV dealership program

An electric Ford truck is displayed during the Electrify Expo D.C. in Washington, D.C., on July 23, 2023. Nathan Howard | Getty Images Ford Motor is ending a controversial electric…

Read more

Leave a Reply