Hard Knock. China surprised by the blow from Europe. Drivers will also get hit

All electric cars from China that enter the European Union from March 7, 2024 may be subject to punitive anti-subsidy duties. The EU will now start customs registration of imports of electricians from the Middle Kingdom, reports . In a document published on Tuesday, the European Commission stated, among other things, that it has sufficient evidence showing that Chinese electric vehicles are subsidized and that their imports have increased by 14%. year to year from .

“In order to be able to use the registration to impose definitive duties retroactively, the EU must first impose temporary duties – wrote Justyna Sopińska from mlexmarketinsight.com on the X platform on Tuesday. In other words, if the EC finds that Chinese cars have violated the competition rules, Brussels will be able to impose retroactive duties on vehicles that have entered the EU market since March 7. The final verdict in this case is to be issued in November, but already in July the EC may impose temporary customs duties with retroactive effect.

The Chinese are disappointed with the European Commission’s decision

The European Commission said that EU producers could suffer damage that would be difficult to repair if Chinese imports of electric cars continued at the current rate. The EU’s China Chamber of Commerce expressed disappointment at the move and added that the sharp increase in imports simply reflects growing demand in Europe for electric vehicles.

There is a growing feeling in the European Union that the fight for electric cars and the automotive sector must be fought with China. This is the result of lobbying by some European manufacturers, mainly French and Italian, and is aimed at saving the European car sector

– says Jakub Jakóbowski, deputy director of the Center for Eastern Studies, in an interview with Next.gazeta.pl. – In the area of ​​electric cars, the Chinese have great advantages. Partially technological, because they started developing this industry very early, but also, and this is the subject of these EU proceedings, they have advantages resulting from subsidies.

These subsidies are evident, they pass on to Chinese manufacturers at many levels and make Chinese electric cars much cheaper than European ones and cheaper than their real production costs

– adds the expert.

Expert: Prices of Chinese electric cars will go up. The question is, by how much?

In his opinion, when assessing this type of customs wars, two factors must be taken into account: the short-term consumer interest and the long-term interest related to the economic condition of the entire European Union. When it comes to the former, one thing is certain: drivers will pay more. Jakub Jakóbowski emphasizes that, inevitably, after the EC’s decision, the prices of imported Chinese electric cars will increase. – We don’t know yet how much. Probably to at least equalize the tariffs that the Chinese impose on European cars – he estimates.

A long-term factor related to the economic condition of the entire EU also concerns “whether we will save jobs related to the automotive sector.” – This is a powerful sector that is responsible for a large part of the added value of European industry. Also in Poland, both through foreign investors and Polish sub-suppliers in European supply chains – reminds Jakóbowski.

European Commission, customs duties and a blow to Tesla and Dacia

The deputy director of OSW also adds that the European Commission’s decision may also affect Western producers of electric cars located in China. “Every electric car from China imported to the EU must be registered. If the EU imposes punitive anti-subsidy duties (it’s still a few months away), they will in absentia affect all those already purchased. Brussels takes no prisoners – it’s not only BYD or Nio, but also Tesla and Dacia with China,” the expert wrote on the X platform.

– When we talk about importing electric cars from China, BYD, Zeekr, Nio, or Xpeng come to mind, brands that say little today, but I think they will say a lot soon to ordinary consumers. And this is not all or even most of the electric cars imported from China today. In addition, we have a large and second stream of imports from Western companies that locate production in China and then sell it in Europe. And they partly benefit from this Chinese electromobile ecosystem, which is very developed, and often indirectly from subsidies – says Jakóbowski.

In this case, the expert points to, for example, Tesla, which sends electric cars to Europe from its Shanghai gigafactories. – Similarly, the Renault concern produces and wants to develop the production of selected Dacia models also in China. This is a strategy that is intended to increase the cost competitiveness of Western producers because they benefit from the Chinese ecosystem. The fact that large international manufacturers are moving production to China to increase their profits is, in my opinion, a very negative scenario from our point of view. Because it may mean that, for example, factories from Central Europe will also move there, said the deputy director of OSW.