The European Commission has announced countervailing duties on electric vehicles produced in China. Currently, electric vehicles produced in China are up to 30% cheaper than similar European-made models.
Competitiveness of Chinese electric vehicles
The European Commission’s investigation has tentatively shown that the electric vehicle industry in China is using unfair underpricing to deter competition. This poses a risk of economic harm to EU electric car manufacturers. Following these worrying signals, the European Commission contacted the Chinese government to find a WTO-compatible way to resolve the situation. The investigation also examined the potential consequences and impact of the proposed duties on importers and users of green vehicles in the EU.
How high will the tariffs be?
The Commission has revealed the level of provisional countervailing duties it expects to impose on imports of electric vehicles from China if talks with the Chinese authorities do not lead to a successful resolution.
Provisional countervailing duties would only be levied if definitive duties are imposed. The existing duty on Chinese electric cars was 10%.
The individual duties the Commission wants to impose on the three sampled Chinese producers would be as follows: SAIC: 38.1%; Geely:20% BYD: 17,4%. Other BEV producers in China that cooperated with the investigation but were not included in the sample would be subject to a weighted average duty of 21%. Manufacturers that did not co-operate in the investigation would be subject to a duty of: 38,1%.
If talks with the Chinese government are unsuccessful, tariffs will be introduced as early as 4 July this year.
