the possibility of passing the anti-subsidy tariff on electric vehicles is still high, and there are many obstacles for chinese companies to enter europe
2024-09-23
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xinhua finance, frankfurt, september 21 (reporter shao li) the current consultations between china and the eu on the eu's anti-subsidy tariffs on chinese electric vehicle exports have entered the most critical stage. it is reported that the eu has postponed the member state vote on the 25th.
however, experts generally believe that the eu's anti-subsidy tariffs will eventually be passed, and the possibility of further reductions in tariff rates is not high. in addition, the obvious shrinkage of the european auto market and the low brand influence are obstacles that chinese new energy vehicles need to overcome in order to truly win the european market.
on friday, german media reprinted reports from chinese official media that china and europe were negotiating in brussels on a price commitment proposal put forward by the chinese industry in order to reach a solution acceptable to both sides.
on the same day, us media disclosed that in order to enable the two sides to complete the negotiations, the european union had postponed the final vote originally scheduled for september 25 on the bill to impose tariffs of up to 35.3% on electric vehicles imported from china.
previously, the price commitment solution submitted by the china chamber of machinery and electronics and all electric vehicle manufacturers proposed to increase the price of exported cars and introduce quotas. however, the eu, including germany, rejected it as not in line with the rules of the world trade organization (wto).
even the german media questioned the eu's approach during the entire investigation, saying that the european commission has adjusted the tax rate three times, which shows that it is not based on objective standards, but is a random patchwork. byd only needs to pay an additional 17% anti-subsidy tariff, while german manufacturers are required to pay at least 21.3% additional tariffs. tesla successfully persuaded the european commission to reduce the tax rate to 9%, and such data is difficult to withstand scrutiny.
alicia garcia-herrero, a trade expert at the bruegel institute, a brussels-based think tank, said eu tariffs on chinese electric vehicles were unlikely to be withdrawn and no further reductions were expected.
it is understood that only if at least 15 countries in the eu council, covering at least 65% of the eu population, oppose the bill can the implementation of anti-subsidy tariffs be prevented at this time. however, this is considered unlikely to happen because france and italy, two populous countries, still publicly support the imposition of tariffs. there are obvious differences within the german government, and it is not ruled out that it will abstain again in the formal vote.
scherbok of the china europe institute of asian studies also believes that there is no sign that the eu's anti-subsidy case against china's electric vehicles will be rejected. given that the new european commission is focused on improving europe's competitiveness, including better protecting the eu market from what it considers china's unfair practices, this friction between china and europe will continue.
the sharp decline in eu car sales, especially electric vehicle sales, has also added new difficulties to china's efforts to get the eu to change its tariff practices on chinese electric vehicles.
according to the latest data released by the european automobile manufacturers association, the number of new car registrations in the eu fell by as much as 18.3% in august. new car sales in the four major eu auto markets, germany, france, italy and spain, all plummeted, with germany falling by as much as 27.8%, france by 24.3%, italy by 13.4% and spain by 6.5%.
among them, the number of electric vehicle registrations fell by 43.9% year-on-year. electric vehicles currently account for only 14.4% of new car registrations in the eu, compared with 21% a year ago.
the latest car sales data has heightened the concerns of the european auto industry. the european automobile manufacturers association (acea) issued a statement calling on policymakers to take urgent action to provide assistance, otherwise not only european automakers but also the european economy will be hit hard.
philip sherbok, director of the prague office of the central europe institute of asian studies (ceias), said that even if the eu's temporary tariffs on chinese electric vehicles become permanent, some chinese automakers will still be able to make profits in the eu market, but at lower margins.
for chinese companies, high tariffs not only mean higher export costs, but also greater risks for investing in europe. once labeled as a "subsidy" by the eu, it may become an excuse for the eu to conduct an investigation into the "foreign subsidies regulation" against companies investing in europe in the future, affecting chinese companies' investment decisions in europe.
it can be seen that once the eu's anti-subsidy tariffs are implemented, china will certainly fight back resolutely. in the short term, it is inevitable that chinese electric vehicles will encounter a backlash in the european market. in the medium and long term, it is possible that china and the eu will eventually reach a compromise.
although many car companies have begun to set up production bases in europe, the greater challenges facing chinese companies in the future are to increase brand influence, successfully enter mainstream distribution channels, and penetrate the hearts of european consumers.
according to official data released by germany, byd registered 4,139 vehicles in germany last year, and only 1,432 vehicles in the first half of this year. in fact, china's own brands are currently facing difficulties in expanding their markets in europe, especially in germany.
according to people familiar with the matter, byd is planning to change its importer in germany. byd's current partner is sweden's hedin automotive group. although the group is a large car dealer in europe, its business in the german market is not very active.
according to a survey result released by the bergisch gladbach center for automotive management (cam) on the 20th, one-third of the respondents considered in-vehicle data security as an important criterion when purchasing a car. chinese manufacturers have the lowest trust in this regard. 43% of the respondents even cited data security concerns as a reason not to buy chinese cars.
source: xinhua finance client
