“We expect the European Commission to impose tariffs ranging from 15 to 30 percent. Even if the tariffs are at the high end of this range, some Chinese manufacturers will continue to make solid profit margins on cars exported to Europe due to their significant cost advantages,” Rhodium Group said, according to the FT. “Tariffs in the range of 40 to 50 percent would probably be needed to make the European market unattractive to Chinese electric car manufacturers,” she added.
For companies controlling much of their supply chain, such as Chinese automaker BYD, the tariffs would likely have to be even higher, according to the report. BYD, for example, now sells its Seal U model in China for 20,500 euros (roughly 516,000 CZK) and in the European Union for 42,000 euros (more than a million CZK). In China, according to estimates, he earns 1,300 euros per car, while in the EU, the profit per car reaches 14,300 euros. BYD therefore has a strong incentive to export cars to the EU, warns Rhodium Group.
Imports into the EU are already subject to a ten percent duty, which in the case of the Seal U model is roughly €2,100 per vehicle. “According to our calculations, with a 30 percent tariff, the company would still make 15 percent more profit (per car) in the EU than in China. This means that exports to Europe would remain very attractive,” the report reads.
The European Commission began investigating the subsidization of electric car production in China last October. Last September, EC President Ursula von der Leyen accused Beijing of flooding world markets with electric cars whose prices are artificially low thanks to huge state subsidies.
Last year, the value of imports of electric cars made in China to the EU reached 11.5 billion dollars (roughly 270 billion CZK). It has grown sharply from $1.6 billion in 2020. The data includes, in addition to cars of Chinese brands, also cars of foreign brands made in China, writes the Financial Times.
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