Consumers in Europe may face higher prices for electric vehicles made in China after tariffs on the cars came into effect on Wednesday as part of an effort by European leaders to create what they call a level playing field for domestic auto companies.
The higher tariffs stem from an investigation the European Union started into subsidies provided by Beijing that helped carmakers in China produce and sell electric vehicles, giving them a competitive edge over their European rivals.
Chinese automakers, already forced out of the U.S. market because of tariffs levied against them there, have called the E.U. tariffs “protectionist” and “arbitrary,” arguing that their economies of scale have led to the rapid development of electric vehicle production.
The new tariffs, which come on top of existing import duties of 10 percent, vary based on the amount of subsidies each automaker in China received, starting at 7.8 percent for Tesla and go up to 35.3 percent for SAIC Motor of Shanghai. They are to remain in place for five years.
How will tariffs protect European carmakers?
The automotive sector is crucial to Europe, employing 13.8 million people and accounting for 7 percent of the overall E.U. economic output. But Europe’s automakers were slow to develop battery and gasoline-electric hybrid technologies for cars, instead spending decades focusing on trying to make diesel-fired combustion engines more efficient.
Only after Volkswagen was found to be cheating on its emissions in 2015 did the European automakers shift their focus to battery technology in earnest. By that time, Chinese car companies, including those like BYD that began as battery producers, had been working on electric cars for years.
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Publish date : 2024-10-30 04:45:00
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