some car companies say that electric vehicle prices are not affected by eu tariffs for the time being, but they are "in danger"
2024-10-06
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negotiations between china and the eu on electric vehicle tariffs are still moving forward. china’s ministry of commerce stated on october 4 that the china-eu technical team will continue negotiations on october 7. china will take all measures to firmly safeguard the interests of chinese enterprises.
after the eu's proposal to impose tariffs on imported pure electric vehicles from china received the necessary support from eu member states, many car companies publicly expressed opposition. china's ministry of commerce stated that imposing additional tariffs will not solve any problems and will only shake and hinder the confidence and determination of chinese enterprises in investment and cooperation with europe.
at the same time, some car companies have also stated that they have no plans to increase prices until at least the end of this year.
the direct impact is not yet reflected in prices
saic motor france's mg motor france issued a statement before the eu vote saying that regardless of the outcome of the vote, the eu's decision would not affect the price of its electric vehicles in france this year.
however, france's mg also emphasized that excessive tariffs will hinder europe's green energy transition. it is reported that some european car manufacturers have called on the eu to reconsider key climate goals such as the 2025 vehicle emissions target.
seat, a subsidiary of the german volkswagen group, also said in a statement that it will work hard to prevent additional eu tariffs from affecting the future price of the company's cupra tavascan electric car made in china. prices for all tavascan deliveries in 2024 will remain unchanged, the company said.
seat also emphasized that the eu's "punitive" tariffs "put its models produced in china at risk" and will have a great impact on the company and the entire european auto industry. the company said it will continue to monitor changes in the situation and take all measures together with the volkswagen group to reduce the adverse impact.
in addition, chinese electric vehicle giant byd is expected to maintain sales prices in some eu countries such as italy until the end of this year.
u.s. electric vehicle giant tesla did not immediately comment on the eu's tariff increase on china's pure electric vehicles, but chinese-made tesla exports to europe currently enjoy the lowest tax rate of only 7.8%. in comparison, byd has imposed an additional tariff of 17%, geely has imposed an additional tariff of 18.8%, and saic has imposed an additional tariff of as high as 35.3%. these tariffs are in addition to the eu's current standard tariff of 10%.
according to data from automotive consulting firm jato, in august this year, affected by the uncertainty of the eu’s tariffs on chinese-made electric vehicles, the number of electric vehicle registrations by chinese automakers in europe fell by 48% compared with the same period last year, the highest level in the past 18 years. lowest level in months. among them, saic mg's sales in the european market fell by 65% year-on-year. in contrast, byd, a new chinese heavyweight in the european market, continues to make significant progress in the european market, with registrations increasing by 19% year-on-year.
among european car brands, bmw, mercedes-benz and renault all saw their registration volumes in europe drop by more than 50% in august. however, the sales of us electric car company tesla achieved a year-on-year growth of 7%, and geely holding group also doubled its sales growth in europe with volvo's new electric models.
how do companies adjust their strategies to respond?
bill russo, founder and ceo of the automotive consulting company automobility, told china business news: "currently, the eu only imposes tariffs on pure electric vehicles (bevs) made in china, and the direct impact is limited to plans to sell pure electric vehicles in europe. a few companies, namely tesla and byd, currently have the lowest tariff rates.”
lowe believes other auto companies can offset the impact of the tariffs by retooling sales of gas or hybrid electric vehicles that are not affected by the tariffs.
"in the short term, chinese companies can prioritize selling electric vehicle products in other regions such as the middle east and southeast asia. in the long term, they can assemble electric vehicles outside china to avoid the impact of tariffs that only apply to electric vehicles assembled in china." he told china business news reporters.
denis depoux, co-president of roland berger's global management committee, told china business news: "the eu has formulated different tax standards for different electric vehicle manufacturers to reflect the subsidy level assessed by the european commission. we believe this it will accelerate the investment of chinese automakers in europe, which will correspondingly reduce china’s exports and achieve more localized manufacturing in europe.”
in order to better integrate into the global automobile market, chinese electric vehicle companies have begun to seek overseas expansion. byd opened an electric bus manufacturing plant in hungary in december and has pledged to build a new electric vehicle factory there. geely also plans to move some car production from china to belgium.
nomura securities analysis believes that in the long run, setting up factories locally in europe may be the "ultimate solution" for chinese automakers.
volkswagen group ceo oliver blume said in the latest article published by germany's bild am sonntag that the eu should consider adjusting planned tariffs on electric vehicles made in china and consider chinese electric vehicle companies operating in europe. investment.
"this should not be about punitive tariffs, but about giving investment credits to each other. businesses that invest, create jobs and work with local companies should benefit in terms of tariffs," bloom said.
in order to avoid escalating trade frictions, china and the eu have been conducting consultations on relevant issues in the second half of this year. china's ministry of commerce stated that since the end of june, the two sides have conducted more than 10 department-level technical consultations and two deputy ministerial-level consultations on the electric vehicle countervailing case. the two sides clearly expressed their political will to resolve differences through consultations and unanimously agreed to open the "price commitment negotiations" to avoid escalation of trade frictions.
(this article comes from china business news)
