Automotive News Europe — 2024-03-05
Automotive Industry
The EU could impose retroactive tariffs on Chinese electric car imports to protect European producers.
The European Commission says it has evidence the Chinese government is subsidizing EVs exported to Europe through “direct transfer of funds” and other mechanisms.
The commission is in the midst of an investigation into whether Chinese-built EVs are receiving unfair subsidies. Potential remedies could include tariffs to protect EU producers. The probe is due to conclude by November 2024, although the EU could impose provisional duties in July.
The commission said it would start customs registrations of Chinese EV imports on Thursday, 7 March 2024, meaning they could be hit by retroactive tariffs from that point if the EU's trade investigation later concludes that they are receiving unfair subsidies.
The China Chamber of Commerce to the EU said that it was disappointed by the move and that the surge of imports reflected increasing European demand for electric vehicles.
On Tuesday, 5 March 2024, the commission published a document that said it had sufficient evidence tending to show that Chinese EVs were being subsidized and that imports had increased by 14% year-on-year since the investigation was formally launched in October 2023.
The commission said on 5 March 2024 that it could not estimate the amount of any potential retroactive tariffs.
Chinese automakers, including BYD and SAIC'S MG, are targeting Europe with a range of competitively priced EVs, putting pressure on mass-market manufacturers such as Stellantis and Volkswagen Group.
BYD, which overtook Tesla as the world’s biggest electrified vehicle maker in 2023, said in December 2023 that it will build a car factory in Hungary to boost sales in Europe.
The commission said it had evidence that showed EU imports were being subsidized, although it did not list specific instances. Those subsidies include:
The commission said the exports from China constituted “critical circumstances” through “massive imports in a relatively short time.” There were 177,839 imports from October 2023 until January 2024, an 11% increase over the investigation period of October 2022-September 2023.
Imports increased by 14% year over year in the period from October 2023 to January 2024, the commission said.
If Chinese imports continue at the current pace, the commission said, EU automakers could face diminishing sales and reduced production levels. That could “negatively affect employment and the overall production of union producers,” the commission said.