The European Commission has announced that car manufacturers such as BYD, Geely and SAIC (owner of MG) have been officially informed of this new customs tax on electric cars, which will come into force around July 4.
What does Mini have to do with it? While the investigation is mainly targeting Chinese electric cars, Western manufacturers such as Tesla, BMW and Renault are also involved.
The cold shower
Indeed, brands that manufacture in China and export to the EU will also have to bear additional costs. And it’s a cold shower! Customs duties will increase from 10% (currently) to 48.1% (the basic 10% in force before July 4 plus the 20 and 38.1% added by the EU from July 4).
The duties applicable to each manufacturer will indeed vary depending on the degree of cooperation of the Chinese brands with the European Commission’s investigation. SAIC Motor Corp., which owns the British brand MG, known for its popular MG4 model, expects a 38.1% increase in customs duties… on top of the existing 10%. The state-owned company will in fact suffer the largest increase.
Collateral damage?
BYD will face an additional 17.4 percent duty and Geely, owner of Volvo Car AB, a 20 percent increase. Those who cooperated with the investigation will be charged an additional 21 percent fee based on a weighted average.
Maximum penalty for the electric Mini
With customs duties pushed to 48.1% instead of 10%, the launch of the new generation of the electric Mini Cooper therefore risks taking a hit.
The joint venture created with the Chinese group Great Wall Motor to produce the electric Mini Cooper in China is not mentioned in the list of companies that cooperated in the investigation.
Consequently, instead of accessing generic compensatory customs duties, set at 21%, Mini would suffer the maximum taxation of 38.1% (+ the 10% already recorded).
It remains to be seen whether this increase in customs duties will really be applied from July 4. The standoff is underway and China has also threatened customs sanctions on European vehicles with large thermal engines… German premiums are clearly threatened.
