[itwasntme]

Originally Posted by volkman10

Top European car brands have criticised the new EU tariffs.

Volkswagen said the "negative effects" of the new EU tariffs "outweigh any potential benefits for the European and especially the German automotive industry".

Mercedes-Benz CEO Ola Kallenius said (via Reuters) the "dismantling of restrictions and expansion of fair and free trade has led to economic growth. So we shouldn't go in the other direction now."

BMW has also hit back at the tariffs.
"You could very quickly shoot yourself in the foot," BMW CEO Oliver Zipse said, "we don't think that our industry needs protection."

Reminds me of President Roosevelt’s quote:
If you've got them by the balls, their hearts and minds will follow.

The Chinese have the EU exactly where they wanted to, and can easily institute humongous tariffs on high margin and/or high volume EU exports to China:
https://m.economictimes.com/news/int.../110965900.cms

No wonder the EU OEMs are suddenly bleating about free market et all!

[L8ButV8]

I think the west destroyed their local auto makers, through an over-aggressive and poorly planned push towards EVs. The chinese were more prepared for the electric push, have the raw materials needed, and the Chinese govt will work hand in glove with their automakers to establish global dominance. They will do what it takes to capture the industry.

US and Europe have basically forced themselves into this situation, where they have to levy taxes on chinese manufacturers to protect their local automakers. And this will have repercussions-- as retaliation, China might regulate imports from key American/European companies. All of this pain would have been avoided if the US/Europe undertook a better planned transition to electric cars. They should have first planned for raw material supply & next ensured that local auto makers develop good EV ranges, before pushing EV adoption among consumers (via subsidies etc).

India has done a fantastic job in this regard. EV Import taxes are only low for companies that want to manufacture/create jobs/build technology in India. This is a beautiful strategy that achieves both objectives: (1) accelerate EV adoption via low taxes & (2) ensure that this new burst of EV tech comes from India.

[wocanak]

Originally Posted by L8ButV8

India has done a fantastic job in this regard. EV Import taxes are only low for companies that want to manufacture/create jobs/build technology in India. This is a beautiful strategy that achieves both objectives: (1) accelerate EV adoption via low taxes & (2) ensure that this new burst of EV tech comes from India.

Far too early to declare victory on a just announced policy, where the intended high profile company, i.e. Tesla seems to have backed out and not clear if anyone else is taking it up.

[Sensible_Speed]

The real question that remains to be asked is how will China retaliate? You can be assured they won't accept it quietly. This move poses serious threats to the supply chain of Europe at large. They are completely dependent on China for manufacturing.

There are a number of factors to answer this question. From my limited knowledge, depending on how aggressive they deem this move, China will
-retaliate with similar tariffs on European made cars.
-introduce artificial supply chain disruptions to force the EU to backtrack on the tariffs
-do nothing at all since Chinese EVs, despite the tariffs, still run circles around the atrociously high prices of European vehicles.

In the long run, the European commonfolk are the big losers. In case of an aggressive response from China, they will have to rely on more expensive imports from North America to fulfil their basic commodity requirements. The US is better off in this regard. Although their trade with China is massive, they can call upon 'strategic partners' to leverage the latter's relatively cheaper labour markets.

[volkman10]

In retaliation, China strikes back.

China says launches anti-dumping probe into EU pork imports.

China launched an anti-dumping investigation in January into brandy imported from the EU in a move seen as targeting France.

It also in May launched an anti-dumping investigation into imports of a key engineering chemical from the European Union, the United States, Taiwan and Japan.

Pork is China's most popular meat and a staple of diets in the world's second most populous nation.
Imports of pork and pork by-products from EU nations totaled over three billion dollars last year.

Link:

[SmartCat]

Originally Posted by volkman10

It also in May launched an anti-dumping investigation into imports of a key engineering chemical from the European Union, the United States, Taiwan and Japan.

I wonder how much of this is just routine investigation.

In retaliation, China strikes back. China says launches anti-dumping probe into EU pork imports. Pork is China's most popular meat and a staple of diets in the world's second most populous nation. Imports of pork and pork by-products from EU nations totaled over three billion dollars last year.

If this is truly linked to EU duty on Chinese EVs, then it is a mere slap on the wrist. To begin with, Chinese EV exports to EU was worth $10 billion last year. Because of expected EV sales growth, it might have been $100 billion after 10 years, which is now at risk because of EU tariffs.

Now, pork is a commodity.

- If China increases duties on EU pork, prices in China will shoot up.
- To cover for that, China has to import pork from other exporting countries.
- This diversion to China results in original customers of pork exports from these countries to look for alternative suppliers.
- They will eventually go to EU and import pork from them.

So Chinese duties on EU pork results in nothing more than reshuffling of origin/destination of pork.

[volkman10]

Is this the way forward for Chinese EV manufacturers to re-enter EU market?

Remember the same car will come to India via Stellantis in 2025, though the initial batch will be CBU in last quarter of 2024.

Budget Chinese supermini will be assembled from knock-down kits in Tychy, dodging new 31% export tarriff.

Stellantis builds sub-£20k Leapmotor EV in Poland as tariffs hit.

Chinese EV maker Leapmotor has started production of the T03 electric city car in Poland after proposed EU tariffs came in higher than expected, executives have reportedly said.

Full production will begin in September, Leapmotor told analysts at an event last week, according to investment bank Jefferies.

The 3.6m-long four-seater, a rival to the Dacia Spring EV, is one of two cars that begins Leapmotor’s entry into Europe after Stellantis paid €1.5 billion for a 21% stake in the firm and control over its exports.

Link:

[itwasntme]

I feel India should add a minimum percentage of manufacturing value-add to the existing investment quantum criteria to ensure SKD & CKD kits do not rule the market.

This will incentivise proper technology transfer, boost domestic manufacturing and job growth. Unless we add the percentage aspect, ‘pseudo-Chinese’ OEMs like Stellantis will forever source the critical components like batteries and motors and the BIW from China, while leaving us with sundry items and final assembly.

[PreludeSH]

Automakers are wary of the impending Chinese onslaught in EVs. They would have lobbied for the duties and now are saying these things nervously. This means they don't have a solution to the Chinese EVs on cost and even quality wise to some extent.

This is the power of Chinese market size which India does not have. Ultimately, Chinese will win even with duties on their products unless some one else can replace them. All of this is very political.

[SmartCat]

Originally Posted by itwasntme

I feel India should add a minimum percentage of manufacturing value-add to the existing investment quantum criteria to ensure SKD & CKD kits do not rule the market.

We just have different import duty structure for CKD/SKD/CBU (15%/30%/100%). There is also 15% import duty on automobile component imports.

And because of such a duty structure, MG India does not have a price advantage over other brands - Astor/Hector/Gloster etc are priced at par with the competitors.

Such a duty structure forces chinese players like MG to compete on quality & brand value, rather than price. It automatically takes care of fair competition, localization, value addition and job creation.

[itwasntme]

Originally Posted by SmartCat

Such a duty structure forces chinese players like MG to compete on quality & brand value, rather than price. It automatically takes care of fair competition, localization, value addition and job creation.

Agree, but EVs are all battery (~40%) and motors (~20%), hence leaves far less with final assembly (compared to ICE) + factoring in hugely automated processes.

Will lead to significantly lower job growth in long term. We need battery manufacturing (again with majority value-add) in India.

[Chrome6Boy]

Originally Posted by itwasntme

Agree, but EVs are all battery (~40%) and motors (~20%), hence leaves far less with final assembly (compared to ICE) + factoring in hugely automated processes.

Will lead to significantly lower job growth in long term. We need battery manufacturing (again with majority value-add) in India.

I think the present tax system is good and already makes it a level playing field. If we tax even more then it will make indigenous manufacturers more uncompetitive on a global level.

The job growth should come from people willing to invest in India. It is up to the likes of Mahindra, Hyundai, Maruti and Tata to lead this charge of manufacturing batteries and motors in India competitively.

I don't know if the Chinese will want to do that in India, because they will be handing an advantage to their soon to be biggest manufacturing competitor.

We need Chinese EVs in India. And we must use the likes of the BYD Seal's offerings and price tag as the gold standard for upcoming EV made in India.

[volkman10]

Tit for Tat- Chinese automakers call for 25% tariffs on imported Euro cars with big engines.

European car brands exported 196,000 vehicles with engines exceeding 2.5 liters to China last year.

Leaders in Europe and China want to strike a tariff deal to de-escalate trade tensions.
Chinese car companies and European brands recently met in Beijing to discuss the issue.
German carmakers have exported $1.2 billion of applicable cars to China this year.

Earlier in the week, a closed-door meeting organized by China’s Ministry of Commerce was held in Beijing to discuss options. The meeting was attended by SAIC, BYD, BMW, Volkswagen, Porsche, Mercedes-Benz, Stellantis, and Renault, plus at least two other Chinese auto manufacturers.

The meeting aims to put pressure on Europe and lobby against the new EV tariffs. According to Bosch chief executive Stefan Hartung, the announcement may trigger talks between China and the EU as the tariffs announced by Brussels allow for review.

Link:

[itwasntme]

Good article:
https://www.politico.eu/article/euro...n-medicine-ev/

[volkman10]

EU moves ahead with provisional tariffs on EV imports from China.



SAIC has been hit with the highest new tariff of 37.6%. State-owned SAIC is the Chinese partner of Volkswagen and General Motors. It also owns MG, which produces one of the top-selling EVs in Europe, the MG4.

BYD, it is a different story, as it faces an extra duty of 17.4% on the vehicles it ships from China to the EU.

Geely, which owns Sweden's Volvo, will see an additional tariff of 19.9%.

There is also another result of the move - some big Chinese EV firms are planning to build production capacity in the EU, which could help shield them from the new duties.
Work on BYD's first European factory is well under way in Hungary and production is expected to begin there by the end of next year.
Chinese car maker, Chery, has recently signed a joint-venture deal with a Spanish firm that will see the two companies making EVs and other types of cars in Barcelona.
And SAIC is looking to secure a site for its first factory in Europe.

However, with major markets like the US, the EU and others imposing tariffs and other barriers, it looks like China's latest gamble could deepen trade tensions with some of its largest trading partners.

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