EU warns of big new tariffs on Chinese electric cars

An inquiry by the European Commission has determined that the Chinese government’s current electric car subsidies are an economic threat to European EV builders. In response to these findings, a series of new tariffs are now being threatened and will come into force unless the Commission is able to reach an agreeable solution with the Chinese authorities.

If implemented, each new tariff would be calculated depending on the size of the Chinese government subsidy received by each manufacturer and would be in addition to the 10 per cent tariff that the EU has already imposed. The maximum total applicable tariff would stand at 48% and have the potential to significantly increase prices of Chinese EVs on the European market.

Brands like BYD, Lynk & Co, XPeng and Nio are already up and running within the European car market, and all Chinese EVs currently face the standard 10% import tariff when their cars go on sale in the EU. Any additional costs could have a significant impact on the respective retail prices of these cars, which in turn could damage the growth ambitions of their respective brands.

Any brand which complied with the European Commission’s investigation will receive some slight relief under the new plans, incurring an additional 21 per cent tariff for a total of 31 per cent. Those that failed to help with the investigation, though, can face up to a whopping 38.1 per cent tariff for a total of over 48%. One brand which could face this larger percentage is MG’s parent company SAIC.

Car firms can appeal the European Commission's ruling either before or up to four months after the tariffs provisionally come into effect on 4 July 2024. Some foreign carmakers with assembly plants in China, such as Tesla, have also asked for their circumstances to be given special consideration.