[itwasntme]

European Union Hits EVs From China With Tariffs Up to 38%

Controversial but will save their domestic EV industry. India now needs to ensure similar protectionist policies.

https://www.nytimes.com/2024/06/12/b...smid=url-share

[Jeroen]

Originally Posted by itwasntme

European Union Hits EVs From China With Tariffs Up to 38%

Controversial but will save their domestic EV industry.

It’s about the environment, not the domestic car industry!

My main gripe about this policy is, it doesn’t do anything for the domestic EV industry. All those C-level guys with massive salaries and bonuses screwed up completely. They are overtaken left right and center by the Chinese.

The EU should have made some
Conditional term on the EU EV industry in exchange for these market protection taxes.

For starters they should have demanded that all EU EV companies introduce several affordable models in the next few years.

They should have also the demanded the resignation of every board member of any and all EU car company. These guys (and the odd girl) have been asleep at the wheel for years. The Chinese EV strategy was well known years ago and they chose to do absolutely nothing!

I absolutely detest C-level folks that een big bucks and need formal government intervention to survive.

Maybe the Chinese were subsidised, but that was predicted all along.

The EU does a good job in protecting its own market. But it also does a horrible job of holding those who caused this responsible!

Jeroen

[84.monsoon]

I think it is the right move and in fact Europe actually waited a bit too long here. Chinese EVs, with the 10% duties in place currently would have decimated the domestic EV players through the intense competition in Europe. European EV makers who actually build their EVs or major subsystems in China and then import into Europe, like BMW, are also going to be hit by the move.

The customers now have a taste of what they can get from Chinese EV makers and at what price. They are going to clamour for domestic manufacturers to offer similar value. US blocked the trend altogether, by never allowing Chinese EVs to come into the market in the first place.

[Earthroamer]

The entire lithium ion processing after mining is happening in China, where they are controlling major portion of the global supply chain of li ion, cobalt etc used for batteries. So, countries are going to come up with sanctions on Chinese EVs inorder to protect their local manufacturing. It's only logical from the perspective of respective govts .

[SKC-auto]

Waiting for your move China, how about 38% tax on luxury ICE cars?

[nidhikapoor]

What Jeroen said. This seems to be a bailout to those who did not see the writing on the wall and the only ones who suffer are the consumers and of course the Chinese.

NO. India should NOT do any similar protectionism. That's what led to decades of ambis and fiats.

[SmartCat]

Excellent move.

There is a reason why monopolies are bad for consumers, and hence illegal. Age old strategy to achieve monopoly is to first sell at low prices, so that it eliminates competition. Once the competition is eliminated, the monopoly can then set the prices they want. Monopolies are typically corporate entities, but also it can be an organization (Eg: OPEC) or a country (China).

EU/USA just nipped the problem in its bud.

Originally Posted by Jeroen

For starters they should have demanded that all EU EV companies introduce several affordable models in the next few years.

The main hurdle for introduction of lower cost EV model from EU/US automobile company is economies of scale. There is no way they can achieve that with flood of Chinese imports. Remember, the only reason Chinese EVs are cheap is because they already achieved economies of scale, with the active involvement of Chinese Govt.

Now that Chinese companies will be kept at bay, EU car companies introducing affordable EV models is a certainty over the next few years. Economies of scale comes from growing sales trend across months & years. That will give confidence to both component makers & car companies to invest and increase production capacities.

[wheeledwanderer]

There is no stopping the Chinese now when it comes to EV’s. They were always ahead of competition be it New Energy Vehicles (Nio, Zeekr, BYD) or Home appliances (Midia, Haier, agree) or even Solar Panels.

They made us accustomed to low prices while the common man forgot about the quality. Then they started to work on the quality and increased their prices.

Tata says vocal4@local and Nexon and Altroz has battery and other components from China (sold by Tata Autocomp).

Whatever govt. does Chinese find ways to beat it. Now in order to beat the tariffs, Chinese will establish factories in Hungary and Mexico and may be within US itself some day.

How do you then beat them at their game?

[nidhikapoor]

Sensible reaction by the German companies. They are against it. Absolutely makes sense. Trade barriers should be decreasing, not increasing.

https://www.msn.com/en-in/news/India...53ec2555&ei=16

[RMN]

Sensible move.

Originally Posted by nidhikapoor

Sensible reaction by the German companies. They are against it. Absolutely makes sense. Trade barriers should be decreasing, not increasing.

https://www.msn.com/en-in/news/India...53ec2555&ei=16

They are probably worried about additional tariffs being imposed on them by China.

[Srini76]

While I tend to support open markets being an enhancer for accessibility within price points that the demography demands, in this particular case I rather support the move in favour of anti-dumping and differential treatment.

My experience with Chinese products has been ranging between the lower spectrum of good to hopeless maybe cause most of the Chinese product experiences have been with developing nations and that they have better standards for developed countries but that is against standardisation of quality while predatory pricing prevails with the sole intent of disabling local capability. post the disablement its any ones guess how the market is worked with a good example of which would be the Belt and road initiative leading to a debt trap kind of scenario.

I am far from being anything close to someone who understands national economics but say what I have said from a perspective of protecting the local population and markets for self sufficiency which inturn increases sustainability of the community.

Is this the only way to go A.k.a. increasing tariff I don't know but sure could be one way among others which protect every country from the onslaught -

Srini

[souravdas808]

Originally Posted by SKC-auto

Waiting for your move China, how about 38% tax on luxury ICE cars?

I want this war. It will actually benefit India.

[dragracer567]

Originally Posted by Jeroen

The Chinese EV strategy was well known years ago and they chose to do absolutely nothing!

There’s not much they could do! Whatever VW or PSA could’ve done, they could never match the drop bottom prices from China. You can call it overcapacity or you can call it dumping but that’s just the way it is. It was all fun and games when China was producing cheap toys and cloths for consumption in the West but the policy makers should’ve known that the day of reckoning will come where the Chinese will do the same for the remaining high-end manufacturing industries in the West as well.

Look at smartphones - every non-Chinese brand apart from Apple and Samsung are either dead or are irrelevant. Sony, HTC etc unlike Nokia didn’t do anything wrong per se (correct me if I’m wrong) but they never stood a chance against the Chinese overcapacity.

The US and EU are just trying to avoid what already happened with other industries and they are right to do so, the public in the West are increasingly disillusioned where the free trade has led to a booming service industry but turned many manufacturing powerhouses into rust belts - it’s very easy to label these people who voted for the far right in the recent elections as racist but while they’re still richer than most of the world, they’ve seen a visible decline in their standard of living. Trump and his supporters aren’t anti-free trade by chance.

There’s no point in Europeans being able to drive around in cheap EVs if their jobs are at stake!

I’m saying this as a person who used to preach about free trade.

[volkman10]

Electric cars built in China are set to face new tariffs of up to 38 per cent in Europe after an investigation found the Chinese Government has been unfairly subsidising the vehicles.

-The tariffs range from 17.4 to 38.1 per cent – depending on how cooperative a car maker has been with the EU's investigation – and build on an existing 10 per cent duty on vehicles imported to Europe.

-The largest tariff of 38.1 per cent has been applied to SAIC, parent companies of MG and LDV (sold in Europe as Maxus) – and other brands selling Chinese-made electric cars that "did not cooperate in the investigation".

-Manufacturers "which cooperated in the investigation but have not been sampled" will be subject to a 21 per cent tariff, including BMW, Chery, GWM, Nio and Xpeng

-BYD's tariff will be 17.4 per cent, rising to 20 per cent for Geely – parent company of Volvo, Polestar, Lotus and Zeekr.

-The EU said Tesla "may receive an individually-calculated duty rate at the definitive stage," following a "substantiated request".

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."

The European tariffs do not apply to the UK, as it has left the European Union – but analysts have warned the UK could follow to prevent its shores being over-run with electric cars from China.

Link:

[darkgamer]

Originally Posted by itwasntme

Controversial but will save their domestic EV industry. India now needs to ensure similar protectionist policies.

India levies 70% import duty on EV cars below $40k and 100% duty on cars above $40k. Then there’s GST and road tax. In Karnataka for example, a Chinese EV like BYD Seal will have 70% + 5% GST + 10% road tax, with total tax being 96.35%. A more expensive EV will be taxed even more with tax going north of 131%. It’s significantly worse for ICEs with imported cars being priced at almost 3x the price.

We Indians are the inventor of license raj. Nobody beats us in complicated taxes and protectionism.