The influx of Chinese electric vehicles into the European market has sparked research into how implementing significant new tariffs would address the competitive advantage enjoyed by automakers in China. With a quarter of EVs sold in the EU this year expected to originate from China, European policymakers are evaluating measures to level the playing field in the automotive industry.
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Chinese state subsidies on EVs have enabled manufacturers to offer their vehicles at much lower price points compared to their European counterparts. On average, Chinese EVs are nearly a third cheaper than the average EV sale price in Europe. This advantage has allowed Chinese companies like BYD to capture a sizable market share in Europe, while still imposing higher prices on the vehicles they make than in their own domestic market.
For example, the BYD Seal U — priced at around $22,000 in China — is priced over twice that amount in Europe, at approximately $45,000. Despite this markup, the vehicle remains a competitive option for European buyers, costing about $10,000 less than the average EV sale price throughout the continent.
To address concerns about the growing dominance of Chinese EVs in Europe, the EU is considering revising tariffs on these imported vehicles. Currently, there is a 10% tariff on Chinese car imports. Studies suggest that a much higher rate, potentially up to 50%, may be necessary to slow the proliferation of Chinese EVs into the European market.
Such a tariff would place European duties among the highest globally on cars and nearly double the existing tariff imposed by the United States on vehicles imported from China. In the U.S., the Biden administration has reportedly contemplated increasing the existing 27.5% tariff, while former President Donald Trump has proposed raising it to 100% if reelected.
[JACK AYLMER]
YOUR NEXT EURO TRIP MIGHT JUST BE IN A CHINESE ELECTRIC VEHICLE.
CARS FROM THE PRC ARE TAKING OVER EUROPEAN ROADWAYS.
AND IMPLEMENTING ONE OF THE WORLD’S HIGHEST TARIFFS MAY BE THE ONLY WAY TO STOP IT.
SOMETHING THE U.S. MAY ONE DAY HAVE TO CONTEND WITH AS WELL.
A QUARTER OF ELECTRIC VEHICLES SOLD IN THE EU THIS YEAR WILL BE MADE IN CHINA.
BEIJING’S STATE SUBSIDIES ON EVS HAVE ALLOWED CHINESE AUTOMAKERS TO ENTICE EUROPEAN DRIVERS WITH MUCH LOWER PRICE POINTS.
ON AVERAGE, THESE CARS ARE NEARLY A THIRD CHEAPER THAN THE AVERAGE EV SALE PRICE IN EUROPE.
BECAUSE OF THIS, CHINESE CAR COMPANIES LIKE BYD CAN ACTUALLY SELL SOME OF THEIR MODELS FOR TWICE AS MUCH IN EUROPE AND STILL HAVE THEM BE THE LESS EXPENSIVE OPTION.
THE BYD SEAL U FOR EXAMPLE COSTS AROUND $22,000 IN CHINA.
BUT EUROPEAN BUYERS WILL HAVE TO SHELL OUT ABOUT $45,000 FOR THE SAME CAR.
DESPITE THE PRICE HIKE, THAT’S STILL ABOUT 10-THOUSAND DOLLARS LESS THAN THE AVERAGE EUROPEAN EV.
SO THE EU IS NOW LOOKING AT WAYS TO LEVEL THE PLAYING FIELD.
CURRENTLY THEY HAVE A 10 PERCENT TARIFF ON CHINESE VEHICLES-
BUT IF EUROPE WANTS TO SLOW THEIR SPREAD THROUGHOUT THE CONTINENT, THAT’LL NEED TO GO MUCH HIGHER.
A NEW STUDY SHOWS AS MUCH AS A 50% TARIFF WOULD BE NEEDED TO SLOW THINGS DOWN.
MAKING IT ONE OF THE TEN HIGHEST DUTIES ON CARS AROUND THE WORLD.
IT WOULD ALSO BE NEARLY DOUBLE WHAT THE U.S. HAS IMPOSED ON VEHICLES FROM CHINA.
A RATE AMERICAN POLITICIANS HAVE ALSO PROPOSED INCREASING.
THE BIDEN ADMINISTRATION HAS REPORTEDLY CONSIDERED HIKING THE 27.5% TARIFF ALREADY IN PLACE.
WHILE FORMER PRESIDENT TRUMP PROMISES IF HE IS RE-ELECTED, HE’LL BUMP IT ALL THE WAY UP TO 100%
I’M JACK AYLMER, WITH STRAIGHT ARROW NEWS-
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