EU leaders vote to impose new tariffs on Chinese electric cars
European leaders have agreed to introduce harsh new import tariffs on electric cars from China.
According to Reuters, leaders of 10 countries voted to approve proposals for the levies, which amount to up to 45%, recommended by the European Commission. Five countries voted against the move, while 12 abstained from the vote.
EU sources told the news agency that the vote gave the EU executive ‘the necessary support’ to implement the tariffs. The proposal could only have been blocked if 15 EU members representing 65% of the EU population had actively voted against it.
The EC recommended the tariffs after conducting a year-long investigation into Chinese government support for its native EV makers. The Commission believed that Chinese car makers were given unfair subsidies and other government assistance which has allowed them to undercut local manufacturers in European markets.
As a result, it proposed tariffs of between 7.8% and 35.3% on top of existing 10% import duties. These will now apply for the next five years. However, according to Reuters, the EU executive has said it is willing to continue negotiations around alternatives to the levies, including a minimum price or volume cap on cars coming into Europe from China.
Germany is understood to be among the countries which voted against the new tariffs. China represents a third of the export market for German car makers such as VW, BMW, Mercedes and Audi and it had previously warned against any new tariffs for fear of retaliatory levies.
Hardest hit by the new tariffs is MG and Maxus parent company SAIC, which is owned by the Chinese government and was deemed not to have cooperated with the EC investigation. It now faces levies of 45.3% on its Chinese-built models.
Geely, which owns Polestar, Volvo and Lotus and builds many of their cars in China, faces levies of 28.8%, while a number of other European brands with manufacturing facilities in China face tariffs of 30.7%. These include BMW, which produces the Mini in Zhangjiagang and the Volkswagen Group, which builds the Cupra Tavascan in China. Chery, XPeng and Nio also face 30% duties.
Tesla will pay the lowest tariff of 17.8% after successfully arguing for a reduction due to its cooperation, while BYD faces total levies of 27% on models such as the Dolphin and Seal.
Even before the tariffs were confirmed several Chinese brands had announced plans to open manufacturing operations in Europe.
BYD is preparing to begin production in Hungary, Leapmotor International is building the budget T03 city car in Poland, and Dongfeng and Chery are looking into setting up factories in Italy and Spain respectively.
