Will definitive tariffs on BEVs built in China be a blessing or a curse?
31 October 2024
The EU has confirmed definitive countervailing duties on battery-electric vehicles (BEVs) built in China. In an upcoming webinar, Autovista24 editor Tom Geggus will ask Autovista Group experts whether tariffs will be a blessing or a curse for Europe’s automotive market.
On 29 October 2024, the European Commission published definitive tariffs on BEVs built in China and imported into the EU. These countervailing duties come just over a year after the European Commission launched an investigation into subsidisation in the country.
It found that ‘the BEV value chain in China benefits from unfair subsidisation which is causing threat of economic injury to EU producers of BEVs.’ The tariffs came into force on 30 October and will be in place for five years. The new rates will be applied in addition to existing import rates of 10%.
Investigation informs tariffs
Following EU member approval, carmakers producing BEVs in China will be subject to varying definitive tariff levels. Duties are based on the findings of the investigation and companies’ cooperation with the process. The prior provisional rates imposed on 4 July, will not be collected.
The EU stated that talks with China are still ongoing, as the two powers try to find an alternative and WTO-compatible solution. However, this will need to be effective in addressing the issues identified by the investigation. The Commission highlighted that it also remains open to negotiating price undertakings with individual exporters.
The effectiveness of the measures will be continuously monitored by the Commission. Processes will also be put in place to ensure they are not circumvented. The duties will end after five years, unless an expiry review is initiated before then.
A level playing field?
‘The EU remains the global champion for open, fair and rules-based trade. We welcome competition, including in the electric vehicle sector, but it must be underpinned by fairness and a level playing field,’ said Valdis Dombrovskis, executive vice-president and commissioner for trade.
‘By adopting these proportionate and targeted measures after a rigorous investigation, we are standing up for fair market practices and for the European industrial base. In parallel, we remain open to a possible alternative solution that would be effective in addressing the problems identified and WTO-compatible,’ he added.
China's commerce ministry said it does not agree or accept the ruling, Reuters reported. ‘We also noticed that the EU side indicated it would continue to negotiate with China on price commitments,’ the ministry stated.
Beijing reportedly hopes to find a ‘solution acceptable to both sides as soon as possible to avoid escalating trade friction.’ However, China has also told its carmakers to halt big investments in European countries that supported the tariffs, Reuters reports.
As one of the carmakers subject to the largest duties, SAIC announced it would pursue legal in the European court. In a statement seen by Autovista24, it said ‘the investigation involved the disclosure of commercially sensitive information, contained errors in its subsidy determination and has ignored certain key information and defence arguments submitted by SAIC Motor.’
According to the carmaker, these factors allegedly led to an overestimation of subsidy rates in several areas. It added that ‘the EU has specifically targeted SAIC’s pure electric models with an additional tariff of up to 35.3%, a move which will increase car purchase costs for European consumers and also hinder the uptake of electric vehicle ownership.’
Are tariffs a blessing or a curse?
Autovista Group experts will explore the effects of these definitive duties in an upcoming webinar. Register now for Blessing or curse: The impact of EU tariffs on BEVs made in China. This free event will take place on 7 November 2024 at 9.30am GMT / 10.30am CET.
Registered participants will get to hear from a panel of Autovista Group experts, including:
- Ana Azofra, Regional Head of Valuations (Spain, Italy, Portugal)
- Dr Christof Engelskirchen, Chief Economist
- Tom Geggus, Autovista24 Editor
- Dr Anne Lange, Director of Research and Innovation
- Robert Madas, Regional Head of Valuations (Austria, Switzerland, Poland, Hungary).
Across the 45-minute session, this panel will answer three business-critical questions concerning the new definitive duties on BEVs:
- Are tariffs on BEVs built in China a blessing or a curse?
- Do the tariffs introduce new remarketing risks?
- What is the risk of trade conflicts escalating further?
The webinar will benefit those wanting to know how new-car prices could be impacted, as well as the remarketing influences. Companies holding BEV asset risks, as well as those providing professional automotive services will find the event insightful.
Register now for Autovista Group’s webinar: Blessing or curse: The impact of EU tariffs on BEVs made in China. It takes place online on 7 November 2024 at 9.30am GMT / 10.30am CET.
