news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

in the ongoing high-level mediation, the friction between china, the eu and the us on electric vehicle exports has also made the latest progress, which is also very pessimistic. among them, the eu rejected the price commitment plan submitted by china, and the united states insisted on its previous decision to impose a 100% tariff on chinese electric vehicles and a 25% tariff on electric vehicle batteries.

does this mean that both doors to the european and american markets are closed? it is difficult to draw a conclusion at present. on september 19, chinese minister of commerce wang wentao will hold talks with european commission executive vice president and trade commissioner valdis dombrovskis to discuss the eu's anti-subsidy case against china's electric vehicles. however, judging from the eu's attitude, this tough battle will not be easy to fight.

judging from the latest statements from europe and the united states, the united states' insistence on imposing heavy taxes on chinese electric vehicles was expected, but the eu's determination was a bit surprising. according to the eu's previous statement, the anti-dumping investigation and anti-dumping duties on chinese electric vehicles were launched mainly because the prices of chinese electric vehicles were artificially lowered due to huge subsidies, "distorting the european market" and damaging the interests of european electric vehicle manufacturers. according to this logic, chinese car companies' willingness to raise prices should be just what they want. but the eu does not seem to recognize this sincerity.

why did the eu reject china's price commitment? regardless of whether the price increase is satisfactory to the eu, in fact, in this game, the price dispute is more like a cover. "chinese electric vehicles may lead the rhythm of the european automobile market and take away the control of the global automobile development direction from europe" is the real dissatisfaction of the eu. on this basis, europe is more afraid of the export of china's competitive culture brought by electric vehicles. therefore, from this perspective, the eu cannot give chinese electric vehicles any chance to become "catfish", and there is not much room for anti-subsidy tariff negotiations. the same is true for the united states.

based on the publicly disclosed negotiation details and the competition between the eu, the us and china since june, it can be inferred that chinese electric vehicle companies should give up the fantasy of a "win-win" outcome, and speed up the formulation of new compliant overseas plans to prepare for an era of high barriers to overseas expansion that requires difficult development.

little room for price negotiation

according to the details disclosed by the china machinery and electrical agreement, after the european commission made a final ruling to impose a high final anti-subsidy tax on imported electric vehicles from china, the china machinery and electrical chamber of commerce coordinated 12 companies to submit price commitment plans within the prescribed time limit in accordance with the investigation procedures of this case. "the plan fully takes into account the characteristics of this case and the previous commitment practices of the european commission, pays attention to the demands of the european side, is fully compliant, and meets the requirements put forward by the european side that it is equivalent to taxation, enforceable and controllable, while showing maximum flexibility." however, "the european side neither communicated in depth with the chinese side nor gave any specific counter-plans, but directly rejected the chinese proposal."

according to ecoson environmental technology, an information platform under the automotive overseas technical compliance alliance, the eu insists that after months of investigation, public funds are spread throughout the entire supply chain of china's electric vehicle industry, exposing european companies to the risk of unbearable economic losses. therefore, the european commission recommends that, based on the brand and its degree of cooperation with the investigation, additional tariffs of 7.8% to 35.3% be imposed on chinese electric vehicle companies on the basis of the existing 10% tax rate. the standard for setting this additional tariff is to narrow the price gap between eu and chinese manufacturers.

the european commission has argued that the huge gap between chinese electric car makers and their eu competitors is a direct result of beijing's massive subsidies for the lucrative industry. price commitments are a trade tool that companies can use to raise prices and control export volumes to avoid anti-subsidy tariffs that chinese-made electric cars may soon face once they enter the eu.

more importantly, the european commission believes that china's price commitment proposals cannot eliminate the "harmful effects" of the "subsidies identified in the investigation" on europe, and these price commitments cannot be effectively monitored and enforced.

as for how much the chinese automakers promised to increase prices, how to regulate them, and how the eu defines the "harmful effects", none of these have been publicly disclosed. but the most superficial logic is that the chinese automakers' promise to increase the price of electric vehicles and reduce exports will only change the amount of revenue chinese automakers will earn in the short term. countervailing duties are a punitive and even retroactive measure. once implemented, they will not only bring the same consequences as price promises, but will also make up for the losses suffered by the european economy.

to put it another way, the eu commission’s requirement is that china’s price commitment must achieve the same effect as anti-subsidy duties in narrowing the price gap between china and europe and eliminating harmful effects. obviously, this directly blocks the necessity of dialogue from a commercial trade perspective.

welcome to the era of high barriers

europe has always been the high ground of the global automobile industry. since china has the ability to export automobiles, entering europe has always been positioned as a very difficult goal. therefore, it is not surprising that it encounters barriers now. in a sense, this is also a battle that is destined to come.

judging from the eu's series of operations and attitudes in this anti-subsidy investigation on china's electric vehicles, the "harmful impact" caused to europe by the eu not only refers to the fact that cost-effective chinese electric vehicles have divided the market share of european local automakers, but also includes the huge changes that may be brought about by the international division of labor and interest structure of the automobile industry.

on another level, the rapid iteration of chinese electric vehicles is permeated with china's deep-rooted competitive culture, economic development model and social values. the "involution" currently popular in the domestic market is the concentrated externalization of this cultural core. this will also have an impact on europe's business tradition of "resisting excessive competition".

therefore, the biggest purpose of anti-subsidy tariffs is to prevent china's "catfish" from disrupting the competition rules and rhythm that have lasted for many years in europe and the united states, and to give local manufacturing a time window to catch up with china's automobile industry.

realizing this, it can be predicted that there is little chance of changing the eu's decision through normal business means. some commentators believe that the current solution can only be found at the political level. the negotiations between the two sides have entered the final stage and the member states will conduct the final vote.

this is also the last ray of hope, because once the anti-subsidy tariffs are implemented, not only chinese electric vehicle companies will be affected, but also european local automakers.

the demands of political power holders and economic development are not completely consistent with the needs of business, enterprises and the market. several major german auto groups have expressed their opposition to anti-subsidy tariffs many times. one-third or one-quarter of these companies' global sales come from the chinese market, and they cannot afford the consequences of china's countermeasures. secondly, the eu's indiscriminate boycott of "chinese-made electric vehicles" will also affect german automakers' export plans based in china.

recently, the head of cupra, a spanish brand under volkswagen, told the media that if the european commission officially imposes a 21.3% import tariff on cupra's electric vehicles produced in china as planned, the brand will be "eliminated" and his company will be "put in danger", which will ultimately affect europe's carbon reduction goals.

cupra has currently put into production the pure electric model tavascan in china. the car is produced by volkswagen anhui, a joint venture controlled by volkswagen in china. the car is not sold in china but is exported to europe. the head of the seat brand said that in the current european economic environment, it is impossible to make up for the additional costs brought by the anti-subsidy tax by raising the price of tavascan, and it is also unrealistic to transfer the huge investment in chinese production capacity to other places. in addition, in order to meet the carbon reduction target, cupra will have to reduce the sales of fuel vehicles.

in response to the demands of domestic auto brands, spanish politicians who previously supported anti-subsidy tariffs have also begun to change their attitude. after visiting china, spanish prime minister sanchez stood in the same camp as german chancellor scholz and called on the eu to abandon its plan to impose additional tariffs on chinese-made electric vehicles. spain's change of attitude has deprived the eu of an important support force for its decision.

however, for chinese companies, they cannot put all their bets on high-level mediation and negotiations. preparations for the worst have been put on the agenda. on the one hand, in order to achieve sustainable development, it is imperative for chinese electric vehicles to enter the two major markets of the european union and north america. domestic consumption has been unable to match the expanding production capacity and development plans of the automotive industry. to put it more bluntly, despite repeated stimulation, the demand for car purchases is limited and can no longer support so many companies in the automotive industry chain, and the intensifying price war has made it increasingly difficult for car companies to make profits.

on the other hand, no matter what the final result is, the way chinese electric vehicles go overseas will definitely change. on the compliance bottom line of international trade and investment, more business model innovations will be born. among them, the high-profile and direct export of complete vehicles needs to be changed to a more strategic and long-term export method. no matter which method is adopted, two points are foreseeable. first, chinese electric vehicles must go abroad to survive, and second, the integration of automobile globalization is unstoppable.