Bad news for the world's leading electric manufacturer, the Chinese BYD, comes as the European Union prepares to impose a hefty 36% tax on imports of Chinese electric cars. This decision is set to create significant challenges for BYD as it seeks to expand its market presence in Europe, particularly in France. The new tax will be in addition to the existing 10% tariffs already levied on vehicles manufactured in China.
The European Commission announced that these customs duties will take effect by the end of October, pending approval from the 27 EU member states. However, the EU has expressed its willingness to engage in dialogue with Beijing to find an alternative solution to these tariffs, which have drawn criticism from member states like Germany and Sweden.
In the meantime, the Commission has decided to halt the collection of provisional taxes that were enacted on July 5. These taxes will remain in a bank account until they are returned, while the new tariffs are expected to be finalized unless a majority of member states oppose them. The Chinese Chamber of Commerce has responded strongly, labeling the EU's actions as 'protectionist' and warning of escalating trade tensions between the EU and China.
The new tax structure will affect various Chinese manufacturers, with BYD facing a reduced surcharge of 17%, Geely at 19.3%, and SAIC at 36.3%. This follows a series of discussions between the EU and the manufacturers, aiming to address their concerns. The European automobile industry, historically dominated by gasoline and diesel engines, is apprehensive about the growing market share of Chinese electric vehicles, which has surged from 3% to 22% in just three years.
Interestingly, the tax imposed on American manufacturer Tesla is significantly lower than that for Chinese electric cars, as the EU cites fewer subsidies received by Tesla from China. This discrepancy highlights the ongoing complexities of international trade and the competitive landscape of the electric vehicle market.
