China Is Urging the European Union to Change Its ‘Wrong Track’ Over Electric Vehicle Tariffs
trading robot

Beijing deemed the European Union’s levies on Chinese electric vehicles protectionist. Nonetheless, these taxes have not deterred China’s top auto exporter, which is hell-bent on carrying out its expansion plans in Europe. For example, later this year, Spain will begin manufacturing electric vehicles.

The response from China and other parties involved in the conflict, such as European and Chinese automobile manufacturers, indicates a solid objection to the decision made by the EU and a desire to reduce tensions.

Experts in the field suggest that Europe and China are both motivated to reach an agreement in the coming months to prevent Chinese electric car manufacturers from incurring significant new expenses. This is because the EU’s procedures include a thorough evaluation process.

China has expressed its determination to protect its interests in response to the European Commission’s recent decision to impose additional tariffs on Chinese electric cars. The Chinese government has vowed to take all necessary actions to safeguard its position in this matter.

We call on the EU to attentively consider the unbiased and logical opinions from various sources, promptly rectify its erroneous actions, cease the politicization of economic and trade matters, and effectively address economic and trade conflicts through open discussions and negotiations,” expressed Lin Jian, a spokesperson for the Chinese foreign ministry, during a routine press briefing. Nevertheless, Chery Auto, the leading automaker in China in terms of export volume, seemed unfazed.

Charlie Zhang, the vice president of Chery Auto and president of its European business, announced that the company intends to commence electric vehicle production by the end of the year at its newly acquired factory in Spain. This marks Chery Auto’s inaugural manufacturing facility in Europe.

According to him, the website will help mitigate the consequences of the tariffs. Competitors BYD (SZ:002594) and Great Wall Motor are also considering establishing manufacturing and assembly facilities in the area. Their goal is to mitigate the financial impact of tariffs while increasing the sales of affordable vehicles to compete with European rivals and compensate for sluggish sales in China.

trading robot

A Space in Which to Look for a Solution

According to a commentary by state news agency Xinhua, Brussels appears to have allowed further discussions between the two sides to reach a resolution. The commentary expresses hope that the EU will carefully reconsider its actions and refrain from moving in the wrong direction.

Beijing has dismissed the EU and U.S. claim that the excessive production capacity in China’s electric vehicle (EV) sector poses a threat to foreign car manufacturers due to subsidized exports. According to experts, the implementation of tariffs is expected to have a negative impact on the adoption of electric vehicles, pose a threat to the achievement of climate-change objectives, and result in increased expenses for consumers.

Brussels intends to impose additional taxes on Chinese subsidies, ranging from 17.4% on BYD to 38.1% on SAIC. Along with the usual 10% vehicle tax, these extra levies will also apply. The most significant overall rate now stands at about 50%.

Washington has also announced its intentions to increase tariffs for Chinese electric vehicles by four times, reaching a staggering 100%.

Chery was more vocal than other car manufacturers. Geely, the majority stakeholder in Sweden’s Volvo Car, expressed deep disappointment and made a firm commitment to take all necessary actions to protect its rights.

SAIC, a government-owned company that relies on partnerships with Volkswagen and General Motors to maintain its position as China’s leading automaker, expressed significant apprehension regarding the tariffs.

According to Reuters, SAIC, the largest automaker in China for almost twenty years, has been facing challenges in its sales and has been actively seeking ways to decrease its workforce.

Chinese loans made by state-owned banks and other forms of government ownership are plainly subject to extra charges since European regulators view them as subsidies.

The Chinese government has repeatedly shown that it will support efforts to connect new cars to the power grid. To spur this integration, the Shenzhen government has introduced new policies, such as providing huge subsidies of up to 15 million yuan ($2 million) for every vehicle-to-grid project.

Not a Single Death Blow

According to experts, the Chinese auto sector, which includes publicly traded and privately held businesses, has a price advantage over its international competitors. The country’s prominent position in the refinement of battery materials and the presence of government subsidies both contribute to this.

However, companies have been forced to come up with new solutions that have successfully lowered costs due to the severe rivalry in China’s EV market, the largest in the world.

The probe is anticipated to last until November 2, and the EU interim duties are set to go into force on July 4. At that stage, final responsibilities might be assigned, usually for five years.

As expected, the announcement had little impact on the stock price of Chinese electric vehicle manufacturers. Shares of BYD, which are traded on the Hong Kong Stock Exchange, rose 5.8 percent by day’s end.

“According to a research note from Citi, the increase in EU tariffs is seen as a small positive for BYD compared to their previous estimate of a 30% tariff. This development enhances BYD’s prospects for export growth in the second and third quarters of 2024.”

Geely Auto experienced a modest increase of 1.7%, while Leap Motor saw a gain of 2.7%. On the other hand, Great Wall Motor’s Hong Kong shares slightly declined by 1.2%. SAIC Motor’s shares in Shanghai experienced a 1.6% decline.

Joe Mazur, a senior analyst at research firm Trivium China, claims that Chinese electric vehicle producers will likely have to pass part of the price increases on to consumers.

“However, it is certainly not a fatal blow to the Chinese electric vehicle industry in Europe,” he told reporters.

Tesla (NASDAQ: TSLA) electric vehicles produced in China are subject to import duties, which the company expects will spike the price of its Model 3 automobiles.

To protect themselves from the taxes, Chinese car manufacturers have been setting export prices higher than local market prices. For example, in China, BYD requests a far higher price for three important models—sometimes nearly three times the amount.

Despite facing competition from more affordable electric vehicles produced by Chinese competitors, European automakers are not advocating for the implementation of tariffs, as there is little backing for such measures within the continent’s auto industry.

Notable adversaries comprise major European automakers like BMW (ETR: BMWG), Volkswagen, Stellantis (NYSE: STLA), and Mercedes Benz (ETR: MBGn). German car manufacturers, especially, rely heavily on sales in China and are concerned about a potential backlash from Beijing. European car manufacturers also import their own vehicles made in China.

Stocks in several major European car manufacturers experienced a second consecutive day of decline on Thursday, as concerns over potential repercussions from China weighed on investor sentiment.

Volvo Car experienced a significant decline, with a decrease of over 7%.

Worries about a potential backlash extended beyond the automotive industry, causing a decline in the stock of Remy Cointreau, a producer of fine cognac. A French cognac producers’ trade body expressed significant worry on Wednesday regarding the EU’s tariff decision.

In January, China initiated an inquiry into the alleged dumping of EU brandy imports, which is widely regarded as a reaction to the escalating trade conflicts between Beijing and Brussels.

Food companies around the world, including those in the dairy and pork industries, are closely monitoring the situation for any possible response from China.

If you want to revolutionize you digital currency trading and enjoy a good experience, then you should try to find an AI trading bot like Quantum Income PRO.

Peter Bergman (

By Peter Bergman (

Peter Bergman is an experienced financial writer with a passion for helping people achieve financial freedom. With over a decade of experience, he has written extensively on topics ranging from personal finance to investment strategies, and his work has been featured on and other leading financial websites.

Leave a Reply

Your email address will not be published. Required fields are marked *