Electric cars from China could become much more expensive

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https://www.lesnumeriques.com/voiture-electrique/Chinese electric cars taxed in Europe

Chinese electric cars taxed in Europe

A certain number of electric cars from China are available at extremely competitive prices if we consider the standards of the current Western market. There BBC mentions for example the BYD Seagull, a small electric car available for 69,800 yuan (i.e. $9,600 or approximately €8,900). If this model starts selling in Europe, it could double in price due to various safety regulations. But even at double its initial price, around €18,000, the model would remain inexpensive compared to the standards of the electric car market.

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Faced with such aggressive price competition, the European Union fears that such a model would have an irreversible impact on the local market of each country in the union. A fear widely shared by the United States, which was quicker to formulate a response. In May, the Biden administration increased the tariff on Chinese electric cars from 25% to 100%. At the same time, the US government has launched a campaign to subsidize its own auto industry through tax incentives to make locally produced vehicles cheaper to buy.

The European Union on alert

Last September, the President of the European Commission Ursula von der Leyen was able to announce an investigation into Chinese imports, indicating that “global markets are being invaded by low-cost Chinese electric cars”. She was able to continue in these terms: “ their price is kept artificially low because of huge public subsidies from the Chinese state, which distorts our market “.

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In response, the Commission is expected to temporarily increase duties on electric vehicles imported from China, raising the current tax from 10% to 20 or 25%. A less aggressive increase than that implemented in the United States, for a simple reason: this tax will certainly impact Chinese brands, but not only that. For example, as demonstrated by the BBC, BMW's iX3 electric car is built in a factory in China (in Dadong), to then be exported to Europe. This model will be directly impacted by the new customs taxes, even if it is not a Chinese car.

EU set to tax Chinese electric cars

EU set to tax Chinese electric cars

The boss of Stellantis (Peugeot, Citroën, Vauxhall/Opel, etc.) described these taxes as “ major pitfall for countries embarking on this path “, warning that European car manufacturers are engaged in a struggle that he considers ” Darwinian » against the Chinese. An observation shared in part by Luca de Meo, the general director of Renault: “ We are not in favor of protectionism, but competition must be fair “. He calls in particular for the adoption of a strong industrial policy to promote the sector, drawing inspiration from American and Chinese policies.

Indeed, if the European Union does not decide to drastically increase customs taxes, as the Biden administration was able to do, it also does not take the trouble to offer aid to European manufacturers to facilitate the local market.

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