EU hits Chinese electric cars with new tariffs

EU hits Chinese electric cars with new tariffs5 hours ago By João da Silva , Business reporter ShareGetty Images MG owner SAIC is one the car makers hardest hit by the new tariffsThe European Union has raised tariffs on Chinese electric vehicles, as Brussels takes action to protect the bloc\'s motor industry. The new tariffs on individual manufactures range from 17.4% to 37.6%, which is on top of a 10% duty that was already in place for all electric cars imported from China. This could raise the price of EVs across the EU, making them less affordable for European consumers. The move is also a major blow for Beijing, which is already in a trade war with Washington. The EU is the largest overseas market for China’s EV industry and the country is counting on high-tech products to help revive its flagging economy. EU officials say this rise in imports was boosted by "unfair subsidisation", which allowed China-made EVs to be sold at much lower prices than ones produced in the bloc. China has denied this repeated allegation from the US and the EU: Beijing is subsidising excess production to flood western markets with cheap imports. The new charges come into effect on Friday but are currently provisional while the investigation into Chinese state support for the country\'s EV makers continues. They are not likely to be imposed until later this year. So who are the potential winners and losers in this trade dispute? It is not just Chinese brands that are affected by the move. Western firms that make cars in China have also come under scrutiny by Brussels. By imposing tariffs, Brussels says it is attempting to correct what it sees as a distorted market. The EU’s decision may seem tame compared to a recent US move to raise its total tariffs to 100%, but it could be far more consequential. Chinese EVs are a relatively rare sight on US roads but much more common in the EU. The number of EVs sold by Chinese brands across the EU rose from just 0.4% of the total EV market in 2019 to almost 8% last year, according to figures from the influential Brussels-based green group Transport and Environment (T&E). Patryk Krupcala, an architect from Poland, who expects to take delivery of a brand new China-made MG4 in two weeks told the BBC: "I have chosen an MG4 because it is quite cheap. It is a really fast car and it\'s a rear-wheel drive like my previous car which was BMW E46." T&E projects firms like BYD and Shanghai Automotive Industry Corporation (SAIC), the Chinese owner of the formerly

British brand MG, could reach a market share of 20% by 2027. But not all Chinese-made EVs will be hit equally by the new tariffs.Winners and losersThey were calculated based on estimates of how much state aid each firm received, while companies that cooperated with the probe saw the duties they were hit with cut. Based on these criteria, the European Commission has set individual duties on three Chinese EV brands – SAIC, BYD and Geely. 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. "The price for not cooperating is a severe blow to SAIC, which gets 15.4% of its global revenues from EV sales in Europe," says Rhodium Group, an independent research firm. For Mr Krupcala, who bought his MG4 before the tariffs hit, the EU\'s move does not matter much: "I don\'t really care about the tariffs. I have a nice car with a seven-year warranty." For China\'s largest EV maker, 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. That is the lowest increase and one that, according to research by Dutch bank ING will "give the automaker an advantage in the European market". Luís Filipe Costa, an insurance industry executive from Portugal, who has just bought a BYD Seal, says price was one of the deciding factors when he chose his new car. But, he added that even if the European Commission\'s new tariffs had already been in place he would still have gone with BYD because "other brands would also be affected".Portuguese executive Luís Filipe Costa chose a BYD Seal over Western brandsGeely, which owns Sweden\'s Volvo, will see an additional tariff of 19.9%. According to Spanish bank BBVA, the company will "still export to the EU profitably" but "its profits will be significantly reduced." Other firms, including European car makers operating factories in China or through joint ventures, will also have to pay more to bring electric cars into the EU. Those deemed to have cooperated with the probe will face an extra duty of 20.8%, while those EU investigators see as non-cooperative will pay the higher tariff of 37.6%. US-based Tesla, which is the biggest exporter of electric vehicles from China to Europe, has asked for an individually calculated rate which EU officials have said will be determined at the end of the investigation. Still,