The European Commission’s decision to impose significant tariffs on imports of Chinese battery-powered EVs of up to 38% does not seem to have taken China by surprise. The Chinese Electric Cars, which are increasingly becoming global leaders, had been bracing this for quite some time.
The provisional duties, much more than expected, were levied as a consequence of investigation into state aid to Chinese EV Makers since it was thought that Beijing was lending unfair support to Chinese Electric car brands that undercut European carmakers.
The EU Tariffs will not be uniform and will vary from company to company between 17.4% and 38.1%. For Chinese Electric Vehicle BYD, which competes with Tesla as the world’s top producer of battery electric vehicles, with the lowest additional levy of 17.4, it could still be viable to grow in Europe.
Earlier, the United States had steeply raised tariffs on EVs from China, from 25% to 100%, with an aim to boost American jobs and manufacturing. With that, only European Union remained that had money and was large enough to absorb a substantial amount of China’s EVs.
Since Europe continues to be one of the most promising markets, Electric Vehicle producers are already thinking of either building factories in Europe or set up joint ventures with existing companies there. BYD is already in the process of building a factory in Europe, and could still profitably export to the EU.
The Chinese government is having big plans for its EV industry, as part of a broader strategy to outpace America in the global tech supremacy.
China, facing an economic slowdown, is promoting a low carbon economy with EVs, photovoltaics and lithium-ion batteries driving the growth.
Though China has no reason to be happy, it seems unlikely that it would rush into a full-blown trade war with its second biggest trading partner since it is already facing economic pressures at home.
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.