The vehicle will be shipped to Europe on December 19, 2022, at the Port of Taicang, Suzhou, China.
VCG | Visual China Group | Getty Images
EU needs to impose higher-than-expected tariffs of up to 55% on Chinese electric cars to curb According to reports, their imports to the EU a new analysis Provided by Rhodium Group.
The findings released on Monday come amid an ongoing EU countervailing investigation into electric vehicle imports from China.
Rhodium Group expects the EU to impose tariffs of 15% to 30% on Chinese electric vehicles and said the tariffs are unlikely to be enough to curb competition from China.
“Even with tariffs at the higher end of this range, some Chinese manufacturers are still able to earn substantial profit margins on cars exported to Europe because they enjoy significant cost advantages,” the report states.
Last year, BYD and other Chinese companies overtook Tesla to become the world’s largest electric vehicle manufacturer. However, compared with the domestic market, BYD’s car sales prices and profit margins are much higher in regions such as the European Union. pay 10% tariff. Chinese electric vehicle manufacturers are locked in a fierce price war in the domestic market.
Rhodium said BYD’s Seal U model, which sells for 20,500 euros in China and 42,000 euros in the EU, will generate an expected profit of 1,300 euros in the domestic market, compared with 14,300 euros per vehicle in Europe. The report added that even with a 30% tariff, companies like BYD will still earn higher profits in the EU.
The report said BYD may need to cut prices to achieve its goal of gaining more market share in the EU. A 30% tariff still leaves plenty of room.
“For highly competitive producers like BYD, higher tariffs of around 45% or even 55% may be required, making exports to the European market commercially unattractive,” the report said.
EU investigation
The European Commission is the executive agency of the European Union, An investigation into electric vehicles and subsidies in China was launched last year, with officials saying a flood of cheap cars threatened domestic producers.
Incentives introduced by China in the early 2010s led to a surge in new startups and increased battery production capacity, paving the way for globally competitive and affordable electric vehicles, some experts say.
Chinese electric car makers already face resistance from the United States due to high tariffs and political opposition, making the European market even more important for companies like BYD looking to expand globally.
According to analysis by the European Federation of Transport and Environment, electric vehicles from Chinese companies are expected to account for 11% of the EU market by 2024 and may reach 20% by 2027.
If you include Chinese-made cars made by non-Chinese companies, this figure is expected to exceed 25% this year.
Electric vehicles imported from non-Chinese companies may also be subject to EU subsidy investigations, and Rhodium estimates that tariffs of 15%-30% may wipe out the business of foreign companies such as BMW or Tesla that ship cars from China.
In response to policy risks, electric vehicle manufacturers have been working to shift production to Europe. BYD plans to build a factory in Hungary.
However, Luo Ding added that Brussels could use other means to protect the European electric vehicle industry, such as restricting Chinese imports on national security grounds or increasing consumer subsidies for EU-made cars.
The Chinese government has blasted the EU subsidy probe as “blatant protectionism”, saying Chinese companies are more competitive than their Western counterparts.
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