EU China Tariff Action May Undermine Its Own EV Mass Market Drive

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EU,China,BMW

As a former European Automotive correspondent for Reuters, I’ve a spent a few years writing about the industry. I will penetrate the corporate hype and bluster and find out how these gigantic enterprises are really doing. I also love to drive their magnificent machines, and their more modest ones. I’ll be telling you if the technology works, too.

The European Union’s decision to raise tariffs on Chinese electric vehicle imports by up to nearly 40% sounded harsh but analysts reckoned it wouldn’t provide much of a barrier to China sales because of their huge efficiency advantage.

“Those relatively low rates will slow, not stop, their march into the European Union," Breaking Views columnist Katrina Hamlin said. EV researcher Rho Motion said sagging sales of EVs in Europe won’t be helped by higher prices for Chinese EVs. EV sales in Europe have stalled at around 2 million a year after an initial seemingly unstoppable momentum petered out. Sales must quickly gain momentum if they are to reach the predicted around 9 million by 2030. Even this level would lag behind EU and U.K. targets that EV sales reach about 80% of overall vehicle sales in 2030 on the way to 100% by 2035.

In the buildup to the EU decision, German manufacturers like Volkswagen and Mercedes had put the case for free trade, knowing that the EU action might spark a Chinese reaction. The VDA, like T&E, wanted an active industrial policy to develop EVs. The European Automotive Manufacturers Association had a similar thought.

 

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