Jerry Gan, CEO of Geely Auto Group, unveils the Galaxy Starship a new technology flagship AI-driven SUV prototype during Auto China 2024 in Beijing on April 25, 2024. The European Union threatened on Wednesday, June 12, 2024, to hike tariffs on Chinese electric vehicles, escalating a trade dispute over Beijing’s subsidies for the exports that Brussels worries is hurting domestic automakers.
But EU officials complain Chinese’s homegrown automakers are poised to gobble up market share by undercutting European car brands on price thanks to Beijing’s massive subsidies. The US tariffs block virtually all Chinese EV imports. In contrast, the European Union needs affordable electric cars from abroad to achieve its goals of cutting greenhouse gas emissions by 55 percent by 2030.Chinese carmakers have learned to make electric vehicles cheaply amid ferocious price competition at home in the world’s largest car market. BYD’s Seal U Comfort model sells for the equivalent of 21,769 euros in China but 41,990 euros in Europe, according to Rhodium Group figures.
For EVs, that includes orders for government fleets, low-interest loans from state-owned banks, cheap land for factories from local governments, tax breaks, and subsidized raw materials and parts from state-owned industries. Five of BYD’s six models would still earn a profit in Europe even at a 30 percent tariff, according to Rhodium Group calculations. Meanwhile a China-made Tesla Model 3 would sell at a loss.
Yet the impact may be smaller than feared, according to analysts at research firm Sanford C. Bernstein.