E-cars from China: last word on countervailing duties has not yet been spoken
The tariffs on electric cars from China that came into force today could be abolished after all. This would not make it cheaper for buyers in the medium term.
The affordable electric car Leapmotor T03 (driving report) is also built in Poland. The European Stellantis Group has adopted the Chinese start-up in good time, so to speak.
(Image: Leapmotor)
The so-called countervailing duties on battery-powered electric vehicles, which were decided against Germany's vote, are showing signs of how manufacturers from China could avoid them. The European Union wants to use the tariffs to compensate for what it considers to be unlawful subsidization of the Chinese electric car industry by Chinese state agencies, which would hinder European vehicle manufacturers in their conversion from combustion engines to electric drives. These measures, known as "countervailing duties" in EU parlance, came into force on Wednesday and stipulate different rates of duty for different manufacturers.
At midday in Berlin, the German government reiterated that it would have preferred a different approach. This is because German companies are now also subject to the regulations with vehicles from the production sites of their joint ventures in the People's Republic, and Berlin also fears a possible trade war between the EU and the People's Republic, although the latter is still willing to negotiate. However, the EU is responsible for trade policy. Spokespersons for the German government and the Federal Ministry for Economic Affairs and Energy said in Berlin at midday that the EU hopes to reach a good agreement with the Chinese side in the proceedings.
"Exceptional circumstances"
There is now clarity from Brussels as to how the dispute could at least be dampened. Formally, the EU tariffs that have just been set are only in force for five years. However, according to sources familiar with the matter, there are still other possibilities: Due to "exceptional circumstances", individual Chinese suppliers, groups of suppliers or all suppliers could be subject to a so-called minimum price obligation even after the formal end of the subsidy investigation.
However, this minimum price would have to reach at least the level of the duties imposed – as a result, the products in Europe would then be just as expensive as with the duties. Politically, however, this approach is considered less sensitive than tariffs. In addition, in some cases, companies can still prove that the EU Commission's findings are incorrect and that the subsidies in their case would be lower in China. In this case, the duty rate or a minimum price may also be correspondingly lower.
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Increase expected, also in price
Individual components of Chinese battery electric vehicles are not affected by the tariffs. However, observers of this market do not assume that electric cars from China will now be delivered to Europe for final assembly as CKD ("Completely Knocked Down") kits. They expect the Chinese share of BEVs on the European market to increase in the coming months: large quantities of electric vehicles have been imported from Chinese production facilities recently. Vehicles that arrived in the EU by October 29 are not subject to customs duties. However, once the stocks are sold out, battery electric vehicles from China are likely to become significantly more expensive – unless China reduces its subsidies in the short term and the companies can subsequently prove this.
(vbr)
