The European Union is considering imposing tariffs on cheap Chinese electric cars, but experts believe that the proposed tariffs may not be high enough. According to researchers, tariffs of 50 percent are necessary to prevent a flood of Chinese electric cars in Europe.
The Financial Times reports that the Rhodium Group estimates that Chinese manufacturers would still be able to make profits even with tariffs set at the high end of the scale. However, one example given is the BYD Seal U SUV, which is sold for half the price in China compared to the EU. Import and customs costs add around 13,000 euros to the price in the EU, while Chinese production costs are low due to large car factories, allowing them to price cars competitively in the European market.
Chinese companies are already gaining market share in Europe, with projections showing that they could capture 20 percent of the Union market by 2027. This has raised concerns among European manufacturers who fear being driven out of business by cheaper Chinese imports. The European Commission is expected to make a decision on tariffs by the end of the year, with temporary tariffs possible as early as May or June.
The impact of tariffs extends beyond Chinese brands, affecting companies like Tesla who manufacture cars in China and export them to Europe. Tesla has faced criticism from European workers who fear their jobs will be lost due to increased competition from Chinese manufacturers. Additionally, Tesla’s recent acquisition of German automaker Automotive GmbH has raised concerns about potential conflicts of interest if Tesla begins manufacturing cars within Germany as well.
