EU’s additional tariff on Chinese cars comes into effect


Lerato Khumalo

The European Union (EU) will impose an additional tax of up to 38.1 percent on imports of electric cars produced in China to member countries as of tomorrow.

The EU Commission made a statement regarding the decisions taken and measures implemented within the scope of the investigation launched due to the subsidies provided to electric cars produced in China.

Recalling that 9 months have passed since the anti-subsidy investigation against China was launched, the statement said, “The EU Commission has imposed temporary countervailing duties on imports of electric cars from China.”

The statement noted that the investigation conducted by the EU Commission concluded that the electric car value chain in China benefited from unfair subsidies.

The statement pointed out that the talks between the Chinese government and the EU have intensified to find a solution on this issue, and said, “Technical level contacts are continuing with the aim of reaching a solution that will address the EU’s concerns and is compatible with the World Trade Organization (WTO).”

The statement noted that BYD will be subject to a tax of 17.4 percent, Geely 19.9 percent, SAIC 37.6 percent, other electric car manufacturers in China that cooperated in the investigation will be subject to an average tax of 20.8 percent, and other companies that did not cooperate will be subject to a tax of 37.6 percent.

“These temporary taxes will be valid for a maximum of four months from July 5,” the statement said, adding that the final tax decision requires approval from EU member states.

Prior to the decision, the EU was imposing a 10 percent tax on electric vehicles imported from China. The latest announced tax rates will be added to the current 10 percent.

In recent years, the share of Chinese manufacturers in electric cars sold in European countries has been rising rapidly.

Sales of low-priced, subsidized electric cars made in China are rapidly outpacing their competitors.

While the share of Chinese brands in electric vehicles sold in the EU was less than 1 percent in 2019, it recently reached 8 percent. It is stated that this rate will continue to increase rapidly if no measures are taken.

China’s electric vehicle exports to Europe are approaching 10 billion euros in 2023, and prices of electric cars in similar segments are 20 percent below models produced in Europe.

Brands such as BYD, SAIC and Geely, as well as Tesla and various European companies, are produced in China.

Manufacturers in some countries in Europe, especially France, are uneasy about Chinese-made models dominating their home markets, while German manufacturers are uneasy about strained relations with China and potential losses in that market.