The electric cars coming from China, are shaking up the market and have also entered the sights of politics. It’s no mystery, Asian competition is also causing a few too many headaches for the four-wheel industry of the Old Continent, which is seriously thinking about intervening to resolve the issue at its root, exposing duties. A spokesperson for the European Commission, during a meeting with the press, wanted to clarify that “The deadline of June 5, initially indicated as the deadline for deciding on the imposition of anti-subsidy duties on Chinese electric cars, was only an indicative timetable.” In short, the game has just begun.
An American model for Europe
Among the rumors that have followed one another in the previous hours, they say that the European Commission could decide to postpone the decision on duties on Chinese cars, after the European elections which will be held from 6 to 9 June. The spokesperson intervened on the issue and clarified that the ongoing investigation has not suffered any unexpected delays and that the deadline for the conclusion of the investigation is set at 13 months from the start, which took place on 4 October 2023. Therefore, to find out the actual outcome and to observe whether it will be taken a categorical decision, the deadline will be July 4ththe date on which the Commission will have to decide whether or not to intervene with duties to stop the Chinese cyclone.
Europe’s possible stance would not be an unprecedented choice in absolute terms, as it would arise in the wake of what was undertaken by the United States. In fact, only a few weeks ago American President Joe Biden intervened on the sharp increase in duties on electric cars imported from China, taking them from the current 25% to almost 100%. This decision was considered to protect the nascent American clean energy industry from Chinese competition which operates in a way that is far more than competitive for all players operating in this sector.
The impact of tariffs
Chinese industry could still be stronger than any tariffs. The impact that this restrictive measure could have on the Dragon’s cars, according to many analysts, would be made lighter by the high margins incorporated into the European list prices. Already in late April, the Rhodium Group, a New York-based think tank focused on the Chinese situation, said in a report that any new tariffs would be expected to increase to 50% (from the current 10%) to have a real impact.
If it is increased to 30%, “Some China-based manufacturers will still be able to generate adequate profit margins on the cars they export to Europe due to the substantial cost advantages they enjoy“, say the experts. Matthias Schmidt of Schmidt Automotive Research thinks the same. The analyst explained to Automotive News that investment bank UBS has found that Chinese automakers have a own price advantage of 30% on electric vehicles made in China, so if there were an increase in tariffs from the current 10% to 25% there would remain a margin, albeit significantly narrowed. Therefore, not much would change for Europe, unless it is decided to raise rates even further.
