- EU Commission announced provisional tariffs on China’s EV imports effective from July 5, pending ongoing negotiations with Beijing.
- Tariffs range from 19.9% to 47.6%, including a 20.8% special duty for cooperating manufacturers in the subsidy investigation.
- Measures aim to address alleged unfair advantages from Chinese subsidies, impacting both Chinese and Western EV manufacturers.
The EU Commission’s tariffs on China’s EV imports have caused a stir, and are being amended ahead of their imminent provisional implementation
The EU Commission recently announced its intended tariffs on imported EVs from China, set to come into effect on July 5. The tariffs, still provisional pending ongoing talks with Beijing, have been slightly altered from initial announcements. Notably, SAIC’s tariff has been reduced to 37.6% from the previously stated 38.1%, while Geely faces a 19.9% duty instead of the initially planned 20.0%.
Manufacturers that cooperated with the EU’s subsidy investigation will be subjected to a 20.8% special duty. However, non-cooperating companies could see tariffs rise up to 37.6%. In addition to these special duties, a standard 10% import duty applies, resulting in a maximum possible tariff of 47.6%.
These provisional measures are scheduled to last until November 5, pending a final decision that could extend them for up to five years.
Negotiations between the EU and China are intensifying to reach a WTO-compliant solution. The solution must address concerns over subsidies allegedly giving Chinese EV manufacturers unfair advantages in the European market.
The EU’s move in mid-June to impose these tariffs followed a thorough investigation into subsidies benefiting Chinese manufacturers. This decision impacts both Chinese brands and external manufacturers producing EVs in China for export to Europe. That includes household western names such as Tesla, BMW, and Cupra.
Given the rising concerns over cost parity between EVs and ICE cars, affordable Chinese imports seemed a valuable solution. However, the EU’s drive to develop its own domestic supply chain is hampering the immediate benefits of cheaper EVs hitting European shores. While the tariffs may not be as intense as those introduced in the US, the additional costs will massively impact the price tag of some initially affordable models.
Ian Plummer, Commercial Director of Auto Trader, commented:
“Tariffs are bad news for consumers so we can only hope that the EU and China can agree a deal before November to prevent these provisional tariffs becoming permanent. The UK should also resist the temptation to follow the EU’s lead. Drivers already face a lack of affordable choices when it comes to electric cars, so it doesn’t make sense for us to limit those options even further for consumers.
We need to bring more buyers into the market by cutting down the ‘green premium’ – which means EVs are usually 35 per cent more expensive than diesel or petrol cars. We’ll only do that with open competition to foster innovation, not by reducing choice.”
