EU punitive tariffs on electric cars from China are in place

In China, numerous electric cars from a wide range of manufacturers have sprung up in recent years. Business is booming: many companies have only recently switched to car production and previously only produced electrical household appliances or mobile phones. It was therefore only a matter of time before manufacturers from the Middle Kingdom gained a foothold in Europe. Since the entire value chain of Chinese electric cars is heavily subsidized according to an investigation by the EU Commission and this threatens to damage the car industry in the EU, punitive tariffs are now being introduced in addition to the previously applicable tariff rate of 10 percent.

BMW and Smart also affected

The punitive tariffs will apply from July 4, 2024 and are initially limited to four months. After that, the situation will be reassessed and a final decision on how to proceed will be made. However, the increased surcharges do not affect the manufacturers equally. For example, BYD will have to pay 17.4 percent for the time being, while Geely will have to pay a little more at 19.9 percent. SAIC currently has to pay the highest punitive tariff at 37.6 percent. However, the Chinese manufacturers not only build electric cars under their own brands, but are also networked with European car manufacturers through joint ventures. For example, Geely produces the new Smart models #1 and #3 in cooperation with Mercedes. The Volvo EX30 also comes from Geely. SAIC also builds the MG4, which was registered a total of 13,263 times in Germany in 2023 and is extremely popular. The BMW iX3 and the new Dacia Spring are also manufactured in China and are subject to the 20.8 percent surcharge. Americans also operate in China: the punitive tariff for the Tesla Model 3 is also 20.8 percent. Manufacturers who do not cooperate with the EU must pay the maximum rate of 37.6 percent.

Still uncertain effects

It is still unclear how exactly the punitive tariffs will affect the respective models, dealers and workshops. However, experts such as Bernard Lycke, General Director of the European dealer association CECRA, agree that the surcharges will be reflected in vehicle prices and will also have an impact on sales figures. Imports could therefore fall significantly. German manufacturers are concerned about the EU’s approach, as China is the largest car market in the world and, conversely, is also of enormous importance for Audi, BMW, Mercedes and Volkswagen.