Setback for Chinese electric car: Europe will force them to raise prices

The latest setback for mobility and electric vehicles comes directly from Brussels. The European Union announced this Wednesday a new rule that raises tariffs on electric vehicles imported from China. This decision comes after a very similar move by the US, which recently imposed a 100 percent tariff rate on this type of product produced in the Asian country.

Electric vehicle makers based in China, EU investigation finds They have advantages by “direct transfer of funds,” “forgiveness or non-collection of government revenue,” or “government provision of goods or services for less than adequate consideration.”

In other words, the EU firmly believes that The Chinese market plays with an advantage and offers unfair competition. European electric vehicle manufacturers. From Brussels, they took advantage of messy tariff hikes in the US to test the waters, which didn’t sit well with the government in Beijing.

In the case of our continent, the situation was not as extreme as in the land of freedom, since the European Union confirmed that the growth will be from the current 10% to an expected maximum of 38.1%..

In fact, we already know what it is tariff increase for the most relevant brands in the Asian country. Not all of them face the same increase, and the list is as follows:

• BID: 17.4%
• Gili: 20%
• SAIC: 38.1%
• Other producers cooperating in the tariff measure: 21%
• Manufacturers who did not cooperate: 38.1%

All indications are that unless the World Trade Organization reaches a different agreement with Beijing, The measures will begin to be introduced on July 4. this year 2024. That is, in less than a month.

Electric Vehicle Buyer, Be Prepared

Now, in addition to the relationship between the governments of Europe and China, this growth will have almost immediate effect for the end consumer. The German Keil Institute has calculated that taxes of 25% represent significant decline in the number of electric vehicles arriving from China. In fact, they dared to name the number 125,000 fewer carsdrop by 25% per year.

And of course, this loss of units will lead to a drop in revenue for Chinese brands around the world. 3.7 billion euros. Knowing these data, it is not very difficult to imagine that the end consumer will pay for the dish with rising prices for electric vehicles coming from China.

If the Chinese market is different in one way, it is in supply. small margins and very attractive rates. So going from 10 to a top tax rate of 38.1%, yes or yes, will force them to move.

What is the real reason for this growth?

Well, this EU political-economic movement has a clear goal: protect your own electric vehicle industry. The Chinese market has great potential and economic benefits in production they create unfair competition with current European brands.

On the other hand is Beijing, which prefers to maintain low tax rates and develop its industry. And how global potential is in his hands many tools to counterattack the European movement.

In fact, some sources claim that China preparing to increase tariffs on pork, dairy products and cars with internal combustion engines which are exported from our continent to an Asian country.