Chinese EVs to Face New EU Tariffs
The EU has issued new tariffs for Chinese EVs, jeopardizing the European-Chinese trade.
- Chinese EVs and any EV manufactured in China are subject to tariffs ranging from 17.4 to 38.1%.
- Most EV makers are unhappy with the development as it jeopardizes their business relations with China.
- China confirmed it will be protecting its interests.
The European Union (EU) is now imposing tariffs on Chinese electric vehicles (EVs), ultimately hurting European consumers.
When purchasing, you look at the spectrum of options you have, be it by price, space, or manufacturer. At some point, the options became so diverse that you could find what fits your needs and lifestyle, green or otherwise, at prices you can afford. However, over the years, this range kept shrinking because trade between countries changed as it became a pawn in their multidimensional cross-continental chess game.
Latest in Tariffs
On June 12th, the EU announced that Chinese EVs will now be subject to tariffs, ranging from 17.4 to 38.1% on top of the 10% car duty. Those percentages translate into billions of euros for the EV makers, which is an issue considering the demand for them both in China and abroad has slowed down. In response, China affirmed that it would protect its interests.
The Best Laid Plans Often Go Awry
The Commission has gone through with this to protect its own carmakers as Chinese EVs have been gaining popularity in recent years. The cheap Chinese electric cars were also challenging European automaker’s businesses. But the tariffs don’t just hit the Chines EV companies. Most European automakers are unhappy. The ones who rely on China for EV manufacturing and then sell in Europe are also subject to the tariffs, including Volkswagen, BMW, Mercedez-Benz, and Renault. Even Tesla will have to pay the tariffs. And the rest fear that this will damage their business relations with the second-biggest economy in the world.
Who’s Getting Hurt Here
Do the new tariffs spell trouble for EVs, Chinese and otherwise? Yes. But they will hit you, the consumer, even harder. Any way that you spin it, getting an EV in this geopolitical climate will set you back more than before.
If Chinese EVs pay the tariffs, their prices will go up. In turn, the range of prices for all EVs in the market will narrow. If they refuse and pull out of the Union, not only will you be stuck with the higher prices from the European automakers, but you lose the option of getting a Chinese EV if that’s what you want to own.
Regardless of what China chooses to do, there’s still the matter of the companies that manufacture in China. They either hike their prices to compensate or move their factories to other places. And considering China has some of the lowest labor costs, the price of manufacturing the EVs will go up, and thus, you’ll have to pay more.
No matter how this plays out, going green in this economy will stop being affordable soon, undoing communities’ work to become eco-friendly.
At the End of Day
The EU has European businesses’ best interests at heart, even though said companies are against the tariffs on Chinese EVs as it will negatively impact their businesses one way or another. But the people truly at risk here are the consumers. With a hike in prices, going green for Europeans for the planet by switching to an EV will become a distant dream considering the state of the economy. And unfortunately, no matter how this plays out, you’ll be stuck with higher prices.
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