New EU tariffs on China’s battery electric vehicles creates lose-lose situation
The EU’s newly confirmed steep tariffs on Chinese made battery electric vehicles (BEVs) could harm green initiatives and negatively affect businesses and people in the EU, say leading audit, tax and business advisory firm Blick Rothenberg.
Winnie Cao, a global mobility partner at the firm said: “The EU will put steep tariffs on Chinese-made BEVs as of 5 July, due to Chinese companies BEVs out-competing electric vehicles manufactured in the EU. Chinese manufacturers have lower labour and energy costs compared to those in the EU as well as a full supply and production chain, meaning they can sell their electric vehicles at a much cheaper price.”
She added: “The lower costs of Chinese BEVs has led to a surge of imports across the EU, but the new tariffs could change that, with SAIC Motor Corp, the largest state owned Chinese motor manufacture facing a tariff of 37.6%. These tariffs not only harms relations with Chinese businesses but green initiatives in the EU.”
Winnie said: “Firstly, it sends a discouraging message to other Chinese businesses who are importing their products to the EU, that they could also be subject to tariffs if they are ‘too successful.’ Which could mean Chinese companies choosing not to bring their business and latest cutting-edge offerings to the EU as it will be more cost effective and a better return on investment to go elsewhere.”
She added: “Secondly, with the rising cost of living across Europe, a cost-effective electric vehicle not only improves quality of life for people living and working in the EU but also helps towards zero-carbon objectives. It means an electric vehicle is also accessible for those with a lower disposable income who are just as worried about the impact of pollution from traditional combustion engines.”
Winnie said: “These tariffs also affect non-Chinese BEV car makers with manufacturing functions in China including Tesla, MG, Lotus and BMW. Meaning the EU could potentially see other major EV businesses decide to move their export business elsewhere.”
She added: “Worst of all, the tariffs could lead to reciprocal actions, where the Chinese government retaliates and puts tariffs on EU goods imported to China, creating a lose-lose situation for both countries. While Chinese economy has slowed down, it still has a significant large population of middle-class spenders and is still a key market that the EU cannot afford to cut off from the world map.”
