Automotive News Europe — 2024-06-21
Automotive Industry
Unlike China rivals, the majority of MG sales are combustion engine, hybrid or plug-in hybrids, which are not affected by the tariff increases.
SAIC likely will not suffer a huge blow if the European Commission presses ahead with its plans to apply a 48.1% tariff on its MG battery-electric cars exported to Europe.
MG is the bestselling Chinese brand in Europe currently with sales of 75,784 through April 2024, up 32%, according to figures from market researchers Dataforce. However, just 17% of MG imports into the European Union will face the additional tariff.
Unlike pure BEV Chinese brands such as Polestar, Nio, Zeekr and Xpeng, the majority of MG sales are combustion engine, hybrid or plug-in hybrids, which are not affected by the tariff increases.
In the first four months, just 32% of MG sales in Europe were full-electric cars, according to Dataforce.
MG is helped by the fact that its biggest European market is the UK, which so far has not followed the EU in applying additional tariffs on Chinese EV imports. UK sales accounted for 38% of all MG’s European volume in the first four months, Dataforce figures show.
MG has also pushed strongly into Norway, which is also outside the EU like the UK Sales of electric MGs in Norway tripled in the first three months to 1646, accoding to Dataforce.
‘Democratizing EVs’
MG is waiting to see what action if any the UK will take in terms of penalizing Chinese EVs.
“I'm hoping that the UK government doesn't necessarily feel the need to follow the European Union,” Guy Pigounakis, commercial director at MG's UK unit, told Automotive News Europe.
MG points to the fact that it is one of the few brands selling EVs competitive with prices of mainstream combustion-engine cars, led by the MG4 battery-electric compact hatchback starting at £26,995 (€31,900) in the UK.
“I would argue that we have actually democratized the ownership opportunities for electric cars,” Pigounakis said.
The MG4 was Europe’s biggest selling electric compact car in the first four months with 17,517 sales, Dataforce figures show.
The UK has one of the toughest mandated ramp-up of electric car sales of any European country, with manufacturers expected to hit 22% of their total passenger car sales in 2024.
Many in the automotive industry expect the UK to follow the EU in applying the tariffs, which are due to go into force in the EU from 4 July 2024 depending on the outcome of negotiations with Chinese authorities.
“Our expectation is that the UK will at some point refer Chinese-made EVs to the Trade Remedies Authority,” said Richard Hebditch, UK director of Brussels-based green pressure group Transport & Environment.
“The EU decision means that it's more likely to do so soon as the Chinese would look to make up for fewer sales in the EU by targeting the UK”
“It’s important that the UK does not become disconnected from Europe [on tariffs],” Toyota Motor Europe chief corporate officer Matt Harrison said at the sidelines of the Automotive News Europe Congress on 12 June 2024.
Non-cooperation
The European Commission said on 12 June 2024 that it will apply additional duties of up to 38.1% on imported Chinese electric vehicles following its eight-month investigation into whether the Chinese government offers unfair subsidies to EV makers.
The Commission said it would set tariffs of 38.1% for SAIC, 20% for Geely and 17.4% for BYD.
The new tariffs will come on top of the existing EU tariff of 10%, which means that SAIC faces the highest additional tariff of 38.1% would end up paying 48.1% on their EVs exported to Europe.
SAIC was given the maximum tariff because the European Commission said it did not cooperate with the anti-subsidy investigation. SAIC criticized the tariff increase, saying its competitive prices were achieved via technology rather than subsidies. "We are planning to bring China's new energy technologies and green factories to Europe," the automaker said in a statement.
China's commerce ministry said the European Commission sought an unprecedented amount of detailed information on Chinese automakers' supply chains during its anti-subsidy investigation. The Commission's requests prompted spying allegations from Chinese state media.