Economic Watch: Industry insiders, experts warn of fallout from EU's extra tariffs on Chinese EVs

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BEIJING/BERLIN, June 13 (Xinhua) -- The European Commission's announcement of provisional tariffs on China-made electric vehicles (EVs) is based on false pretenses, and will not only exact an economic toll on the bloc but also impede the achievement of climate goals, according to auto industry players, trade associations and industry observers interviewed by Xinhua.

The European Commission unveiled on Wednesday its plan to levy provisional additional tariffs of up to 38.1 percent on China-made EVs.


Aside from rebuking the justification given for the tariffs as illegitimate, industry insiders and experts have used such terms as "protectionism," "politicization," and "double standards" to express their opposition to the move.

Expressing its "deep concern and regret" over the European Commission's decision, SAIC Motor on Thursday called on the EU to avoid "artificially setting up trade barriers for EVs" and to safeguard a level playing ground.

SAIC Motor stated that the company "has been relying on technological innovation, rather than government subsidies" to provide consumers in and outside China with green and quality products, noting that the group has invested nearly 150 billion yuan (about 21.09 billion U.S. dollars) in R&D of core technologies such as new energy and intelligent networking over the past decade.

Li Bin, founder of a leading Chinese electric automaker NIO, noted in an interview with Xinhua that EV-related issues should not be politicized.

"We believe that good products and good services should be available to users worldwide," Li said.

Echoing Li's view, NIO issued a statement on Wednesday, "We strongly oppose the use of increased tariffs as a strategy to obstruct the normal global trade of electric vehicles."

"In Europe, NIO's commitment to the EV market remains unwavering, and we will continue to serve our users and explore new opportunities within Europe despite protectionism," it added.

The China Association of Automobile Manufacturers publicized a statement on Wednesday accusing the European side of inappropriate practices during the investigation against Chinese EV manufacturers, including "predetermining survey results, making a biased selection of sampled enterprises, arbitrarily expanding the scope of the investigation and distorting results."

"We hope that the European Commission will not regard the current complete-vehicle trade -- an inevitable phase in the development of the industry -- as a long-term threat," the statement reads, while also cautioning against "politicizing economic and trade issues, abusing trade remedy measures, and distorting global automobile industrial and supply chains."


Experts believed the new tariffs would cause an anticipated surge in consumer costs in the European Union (EU) and bode ill for the bloc's already sluggish economy.

The EU's imposition of tariffs on EVs from China could adversely affect Europe's economy, as well as related businesses and consumers, argued Zheng Yun, senior partner of Roland Berger, a global strategy consulting firm.

German car drivers interviewed by Xinhua gave positive reviews of the Chinese EV models they've tried.

Eugen Richter, who owns an MG4 car from Chinese manufacturer SAIC Motor, said the vehicle's chassis, performance, equipment and fuel consumption are all great, reckoning that the price-performance ratio is "much better than a Cupra or a Volkswagen."

Another German consumer, Chris Brill, said that Chinese EV maker BYD in particular has proven its competence in battery production. "In these key components, things are rather poor in Europe," Brill said.

Bill Russo, founder and CEO of Automobility Limited, said in an interview with Xinhua that Chinese EV companies have a 30 to 50 percent cost advantage. Imposing tariffs on Chinese EVs will seriously increase inflation in the EU.

Additional tariffs will have a negative impact not only on Chinese electric car manufacturers, but also on many Western car-makers producing in China, Russo added.

Moreover, additional tariffs may distort market dynamics, stifle innovation, and hinder benign competition and self-improvement of the local automotive industry in Europe, according to Russo.

Maximilian Butek, executive director and board member of the German Chamber of Commerce in China-East China, expressed concern at the possible implications of the tariffs for trade between China and Germany.

The German economy is export-oriented and therefore reliant on free and fair markets, Butek told Xinhua. Any restrictions imposed on these markets could harm German businesses that operate globally, he added, and so, many German companies in the automotive industry have spoken out against additional tariffs.


Moreover, industry insiders and experts expressed concern that the EU's imposition of additional tariffs on Chinese EVs could hamper Europe's green transition.

Butek said that as European policymakers prioritize the transition to green mobility, access to affordable EVs will be crucial. "We are confident that open markets, rather than tariffs, will provide the best solution for achieving this goal," he said.

Ma Xiaoming, chief analyst of new energy with Nomura Orient International Securities, cited a projection that tariff hikes would reduce the EU's imports of Chinese EVs. Although sales of locally produced EVs are likely to jump by the same margin, it will nevertheless mean higher costs for consumers, because material and labor costs are significantly higher within the EU, which would delay the EU's fulfillment of energy transition goals, according to Ma.

Furthermore, increased tariffs are likely to escalate trade tensions, complicate trade relations between China and Europe, and may cause disruption to the global EV market, thus hindering international cooperation on green technology, said Feng Wei, a researcher with the carbon neutrality institute of the Shenzhen Institute of Advanced Technology, Chinese Academy of Sciences. Enditem

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