EVs built in China face swingeing EU import taxes from next month under new plans
WILL RIMELL
Chinese EVs imported into the EU are to be hit with additional duty rates as high as 38.1% as part of plans to level Europe’s automotive playing field.
The European Commission announced it will apply the new proposed tax on top of the existing 10% tariff.
Talks will now be held with Chinese manufacturers over the levy, and “should discussions with authorities not lead to an effective solution”, tariffs will begin from 4 July.
The move follows months of debate over how best to stem the flow into the EU of Chinese EVs that are able to undercut local rivals by typically 20% as a result of huge subsidies from the Chinese government.
EU trade commissioner Valdis Dombrovskis has previously said: “Competition must be fair.”
In documents released last week, the European Commission confirmed each manufacturer will be hit with an individual tariff determined by EU members.
As part of a sample pool, it confirmed that Volvo parent Geely will be charged an additional 20% in tax duty and BYD 17.4%.
MG owner SAIC, which the commission has considered not to have cooperated with the probe, has been hit with a 38.1% rate. Others that fail to assist will be liable for the same rate, it said.
This could have potentially raised the MG 4’s starting price from £26,995 to £37,280, but in reality the brand will absorb most of the extra cost at the expense of its profit margin.
The Commission said it could revise these figures if car makers provide “sufficient counterbalancing evidence”.
As well as Chinese manufacturers, European brands bringing their own Chinese-built EVs into the EU – car makers such as Mini and Mercedes-Benz – will be given a 21% additional rate.
Tesla, which builds the Model 3 in Shanghai, “may receive an individually calculated duty rate”. This could prompt the American brand to move production of its electric saloon to its German plant, where the Model Y is made.
Chinese-made EVs currently hold an 8% share of the EU market and the Commission predicts this will rise to 15% by the end of 2024.
The Commission said these new laws are being put in place because of the “threat of economic injury to EU BEV producers”.
China’s foreign ministry has claimed the imposition of the new duty rate “violates
