After announcing an increase in customs duties on electric cars produced in China, the European Union decided to make a small gesture. Brussels reduced taxes for two manufacturers, while the Middle Kingdom reacted strongly to this measure deemed unjustified.
The war between Europe and Chinese electric cars continues again and again, even though it started last year. And for good reason, Brussels does not really appreciate it the massive invasion of these cars on its territory, and intends to do everything to slow down the pace, with a lot of measures of all kinds.
A flashback
The European Union had already unveiled a series of measures last year to curb the invasion of Chinese manufacturers, such as MG, BYD and Xpeng. But that obviously wasn’t enough. A few months later, it opened a vast investigation, accusing these brands of unfair competition, benefiting from subsidies paid by the Chinese government in order to display very low prices. Enough to overshadow companies based in Europe, which are also launching massively into electric.
After months of rumors, Brussels finally announced an increase in customs duties for cars produced in China, with rates varying depending on the manufacturer. Those who had cooperated sufficiently during the investigation were less severely affected than the others. A measure that made Beijing see red, which spoke out a few days earlier, criticizing this decision taken by Europe. Is an appeasement of relations between the two powers possible?
Well, it seems the answer is yes. Well, in theory at least. Indeed, the European Union seems ready to take a step so as not to arouse the anger of China, which accuses it of carrying “ infringement of fair competition ” and to compromise ” global green transformation and open cooperation “. According to the American site Bloomgerg, Brussels has decided to reduce customs duties for two major Chinese groups, namely SAIC Motor, which owns MG, as well as Geely.
For the record, the latter is the parent company of Volvo, Polestar, Lynk & Co as well as Lotus and Zeekr, among others. Brands that have all been present on the European continent for several decades for some. From July 4, these two groups were to respectively be fined customs duties of 38.1 and 20%with the aim of reducing their imports to us. But these figures will ultimately be revised very slightly downwards by a few points.
An attempt at appeasement?
SAIC Motor will be subject to a 37.6% tax on its electric carsincluding the MG4, while Geely’s percentage drops to 19.9%. Suffice to say that this drop is very slight, and that it risks in fact not to change much. This is in fact most likely a desire on the part of Brussels to send a signal to the Chinese government, showing that it is ready to make an effort to ease tensions between the two continents.
But will this be enough? Probably not, unfortunately. And for good reason, China recently accused Europe of “ create and aggravate trade tensions “, but not only that. She also plans toimpose customs duties at 25% on foreign cars with large displacement imported into its territory. Not to mention the fact that the Middle Kingdom has also opened an investigation into spirits from Europe, as well as pork. Could the war be just beginning?
No doubt, while the price of Chinese cars expected to rise sharply in Europeas Brussels rightly wishes, which wants to reduce imports into its territory. If this measure worries even manufacturers from the Old Continent, the Chinese firm Nio does not seem too upset. While it prepares the launch of its new Firefly brand in our country, it claims that the latter should remain competitive despite the increase in taxes.
It should be noted that even with 30% customs duties, BYD electric cars sold in Europe should still be profitable for the Chinese manufacturer according to a recent estimate by Rhodium Group.
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