FILE - 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, Thursday, 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.
EU officials fear unfairly subsidized imports will hurt Europe’s manufacturers and the continent’s green tech industries. European countries subsidize electric cars, too. The question in trade disputes is whether subsidies are fair and available to all carmakers or distort the market in favor of one side.
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% 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.