Trade defence: Where’s next for the EU’s EV…

Trade defence: Where’s next for the EU’s EV…

This is a summary. For more, download the full analysis.

Following the anti-subsidy investigation, the European Commission has proposed additional import duties on China-made battery electric vehicles (BEV), ranging from 7,8% for Tesla to 35,3% for SAIC’s MG. With 1 in 5 electric cars sold in Europe last year imported from China, the aim is to level the playing field as European carmakers ramp up their EV offering. The preliminary tariffs have been in force for 2 months, and are set to be confirmed by member states by the end of October. What’s their impact? And what’s next for Europe’s EV trade policy?

The initial results for the EU market are mixed:

Given these initial trends and the expected sales by GlobalData, T&E has updated its China-made BEV imports forecast to 2027.

We predict the China-made imports to peak this year, and then to slowly reduce to 20% in 2025 and around 18% of BEV sales by 2026. While imports of many Chinese brands will grow slower, some of it will be replaced by local production (notably for BYD).

While tariffs are slowing some growth in imports, they are not stopping the ascent of Chinese EV makers, who have high quality and more affordable offerings. The problem is that European mass automakers have been slow to counter that: affordable BEVs are only coming now to coincide with the 2025 car CO₂ target.

In tandem with the 2025-2035 car CO₂ targets, higher EV tariffs make sense as an important part of a coherent industrial policy as more European EV models hit the market. However, if as EU carmakers demand, EU CO₂ targets are weakened, tariffs would deprive customers of choice whilst domestic manufacturers continue to sell ICE vehicles. T&E estimates that the China-made EVs will account for 27% (or close to a third) of all BEVs available to European drivers in the scenario where the 2025 target is delayed and the current EU EV sales continue stagnating as a result.

But the EU should not stop at EVs. Many homegrown battery makers have experienced delays and setbacks in the last few months, driven by global market dynamics of cheap high quality Chinese batteries. Having poured dozens of billions into homegrown battery makers, it makes no sense to have the lowest battery tariff globally, at just above 1%.

If action is not taken, T&E estimates that just 10% of the currently announced battery gigafactory plans (apart from those operating already) are likely to go ahead. An overwhelming 60% is under risk and would likely be scrapped leading to a loss of billions of investment and close to 100k potential jobs.

Source link

Visited 1 times, 1 visit(s) today

Leave a Reply

Your email address will not be published. Required fields are marked *