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■Chinese carmakers challenge EU tariff plans! Chinese carmakers challenge EU import duties, Trump’s potential tariffs, and automotive suppliers announced thousands of job cuts in 2024. Phil Curry, Autovista24 special content editor, reviews this week’s major automotive stories. ■ There was more tariff tension for the automotive market this week. Chinese carmakers challenged the EU’s import duties on battery-electric vehicles (BEVs). At the same time, the possibility of subsidies for BEVs on an EU-wide scale has been mooted. Across the Atlantic, the Trump administration could impose US import tariffs, potentially increasing costs for carmakers. Meanwhile, European industry association CLEPA, released details on the impact of rising costs for automotive suppliers, including job losses. ■ Chinese carmakers tariff battle Chinese automotive manufacturers BYD, Geely, and SAIC have challenged the EU’s import tariffs on BEVs built in China. This follows the confirmation of definitive countervailing duties announced back in October 2024. Under the import rules, BYD could face total tariffs of 27%, Geely 28.8% and SAIC, 45.3%. ■ According to Reuters, the three carmakers have submitted a challenge to the Court of Justice of the European Union. Filings show the carmakers lodged their complaints at the General Court a day before a deadline to do so. The China Chamber of Commerce for Import and Export of Machinery and Electronic Products also filed a complaint. The Chinese Chamber of Commerce to the EU urged Beijing and Brussels to negotiate a compromise to avoid tariffs being applied to BEV imports. EU subsidies for BEVs? The European Commission is considering pan-EU subsidies to boost demand for electric vehicles (EVs). Teresa Ribera, executive vice-president of the European Commission, told the Financial Times at the World Economic Forum that officials are ‘shaping’ options for an incentive programme. Conforming to World Trade Organisation rules while supporting the local automotive industry will be a major challenge. As reported by Bloomberg, German Chancellor Olaf Scholz said that pragmatic solutions were needed, not ideological ones. ‘I am delighted that the president of the Commission has now taken up my proposal for harmonised Europe-wide purchase premiums for electric vehicles,’ he commented. Trump tariff threat Following Donald Trump’s inauguration on 20 January, the possibility of tariffs on imports from China, Canada and Mexico has increased. Proposed duties were not imposed on his first day in office. However, Trump directed federal agencies to evaluate US trade relations with these markets. Volkswagen (VW) warned against the ‘harmful economic impact’ of proposed tariffs on imports from Mexico, where it operates a major factory. The brand is not alone, according to Reuters. Audi, BMW, Nissan, Kia, Mazda, Stellantis, and Toyota all have plants in the country, with import channels to the US.

Automakers pushing back against European Union’s plan for tariffs The SAIC Anji cargo ship exports vehicles from Yantai Port in Shandong province on May 15. [TANG KE/FOR CHINA DAILY] Chinese carmakers and the country's leading auto association have expressed opposition to the EU's latest draft plan on charging extra duties on China-made EVs but said they remain committed to exploring European markets. In July, the EU imposed provisional additional tariffs of up to 37.6 percent on EVs made in China, after it launched an anti-subsidy probe in October 2023. It published a draft plan last week to make those tariffs definitive, at slightly revised rates, subject to approval by EU member states. According to the plan, the anti-subsidy tax rates for the three sampled Chinese EV companies — BYD, Geely and SAIC — are 17 percent, 19.3 percent and 36.3 percent, respectively, on top of the standard 10 percent duty. Other companies cooperating with the EU in its investigation will face extra tariffs of 21.3 percent, the EU said. For those not cooperating, they will be slapped with 36.3 percent import duties. SAIC said it will take further legal measures to protect its rights and interests. Jia Jianxu, the company's newly appointed president, said its sales this year in Europe "will not be less" than last year. "MG's hybrid EVs will soon enter Europe. Local car buyers' enthusiasm with HEVs beats our imagination, with orders piling up to the first quarter of 2025," he added. SAIC admitted that its overall sales encountered some short-term fluctuations due to pressure from Europe and the United States. But the carmaker was quick to add that it will intensify its efforts to recover from these challenges and aims for a steady increase in monthly sales. Geely Holding Group is primarily exporting Lynk & Co and Zeekr vehicles to EU member states, while the namesake Geely brand focuses on countries in Eastern Europe, besides other markets such as the Middle East and Africa. Lynk & Co already has tens of thousands of users in Europe and will deepen its business there, said Geely Auto CEO Gan Jiayue. Zeekr, Geely Holding Group's premium EV brand, admits the EU's tariff plan will hit its business, adding that the company is considering local production in overseas markets but has not made any decision. Daniel Donghui Li, CEO of Geely Holding Group, said the carmaker has made "great contributions to the European economy", with its investment in Europe over the past decade having created thousands of jobs for locals. Li added that Geely will not necessarily resort to the simplistic response of building plants in Europe but may coordinate resources within the group, such as utilizing Volvo's or Lotus' plants, or work with other overseas partners. In a statement on Wednesday, the China Association of Automobile Manufacturers highlighted the significant risks and uncertainties these high anti-subsidy tariffs pose for Chinese companies ope

“The European Union’s new tariffs on China-made electric vehicles may throw up some roadblocks for Chinese manufacturers looking to boost sales in the region, but the likes of BYD are expected to remain competitive against local producers. Companies including state-owned SAIC Motor are being hit with the highest additional tariff, at 38.1%, while Warren Buffett-backed BYD has received the lightest rate, at 17.4%. Geely Automobile Holdings faces a 20% additional tariff. These are on top of the EU’s existing 10% tariff on Chinese EV imports. Following the news, BYD’s shares in Hong Kong surged nearly 9% at one point on Thursday morning. BYD may have received a lower rate because it is privately owned and backed by Berkshire Hathaway. The company has also been very clear about its aim to gradually build up its brand in the EU and appears more willing to work with local regulators. SAIC did not cooperate with the EU’s anti-subsidy investigation.” “It has allegedly received 11.74 billion yuan ($1.65 billion) in Chinese government subsidies over the past three years, according to a Nikkei Asia analysis. BYD received a little over half that amount, though it was still in the top 10 listed companies in terms of government subsidies. SAIC has been China’s leading auto exporter for the last eight years, selling more than 250,000 vehicles in Europe alone in 2023. It said in a statement on Thursday that its sales are due to technology innovation, not government subsidies. China exported 482,000 pure EVs to the EU last year, accounting for 45% of the country’s total electric vehicle shipments, according to China customs data. Exports to the U.S., meanwhile, were negligible. But while the new tariffs will put pressure on Chinese EV sales there in the near term, their cars will likely remain attractive options for European drivers. The Kiel Institute for the World Economy had forecast that a 20% tariff would reduce Chinese EV imports to the EU by 25%.” “That would be 125,000 units, or $3.8 billion worth, of such vehicles. Apart from the impact on profitability, the additional tariffs could drive localization. So far, Chinese EV makers have appeared cautious about expanding production in the EU as they await clarity on tariffs. Once they have that clarity, larger tariffs will encourage Chinese companies to build higher-volume production in China-friendly EU nations like Hungary. BYD said in December it would establish a factory in Hungary, while some Chinese EV companies are collaborating with European brands to enter the market. In April, Chery Automobile and Spain’s Ebro-EV Motors agreed to develop EVs through a joint venture in Barcelona. Last month, European carmaker Stellantis said it had formed a joint venture with Chinese EV startup Leap Motor that will start selling electric vehicles in nine European countries this year. Following the EU announcement, Beijing vowed to ‘take all necessary measures’ to defend its rights.”

10/01/2024 Autos & Transportation Sustainable & EV Supply Chain Regulatory & Policy EU executive to adopt tariffs on Chinese EVs after vote October 4, 202412:11 PM GMT+2Updated 16 min ago BRUSSELS, Oct 4 - The European Commission said on Friday it had received enough support from EU members to impose tariffs of up to 45% on Chinese electric vehicle imports in the bloc's highest profile trade case, but would continue to negotiate with Beijing. The Commission, which oversees the bloc's trade policy, has proposed final duties on Chinese-built EVs for the next five years to counter what it sees as unfair Chinese subsidies after a year-long anti-subsidy investigation. In a vote on Friday, 10 EU members backed tariffs and five voted against, with 12 abstentions, EU sources said. It would have taken opposition from a qualified majority of 15 EU members, representing 65% of the EU population, to block the proposal. The reporter reported on Wednesday that the measure was likely to pass with France, Italy and Poland planning to vote in favor. The EU executive said it had obtained "the necessary support" to adopt the tariffs, although it would continue talks with Beijing to find an alternative solution. The region's biggest economy and major car producer, Germany, voted against the proposal, sources said on Friday. BMW Chief Executive Oliver Zipse described the vote as "a fatal signal for the European automotive industry". He said a quick settlement was needed between Brussels and Beijing to prevent a trade conflict. Volkswagen said the planned tariffs were "the wrong approach." China's foreign ministry did not immediately respond to a Reuters request for comment Stellantis said it supported free and fair competition and that the sector was under pressure from ambitious carbon reduction plans and "the Chinese global commercial offensive". Hungarian Prime Minister Viktor Orban said on Friday that the EU was headed for an "economic cold war" with China. The EU's stance towards Beijing has hardened in the last five years. It views China as a potential partner in some issues, but also as a competitor and a systemic rival. In moves seen as a retaliation, Beijing this year launched its own probes into imports of EU brandy, dairy and pork products. The Commission says China's spare production capacity of three million EVs per year, which needed to be exported, is twice the size of the EU market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe. Page 1 continue The BYD EV Dolphin Mini is displayed as the Chinese electric-vehicle producer announces the launch of the low-cost EV in Mexico City, Mexico February 28, 2024

🇨🇳🇪🇺 China ‘does not agree or accept’ the EU’s EV tariffs, files WTO lawsuit The extra tariffs will range from 7.8% for Tesla to 35.3% for SAIC Motor, and stack on top of the 10% standard import duty for cars to the EU. China has already filed a lawsuit under the World Trade Organization dispute settlement mechanism. China’s commerce ministry said it “does not accept” tariffs imposed by the European Union on Chinese electric vehicles, after the bloc increased tariffs on Chinese EVs to as high as 45.3% on Wednesday. The extra tariffs will range from 7.8% for Tesla to 35.3% for SAIC Motor, and stack on top of the 10% standard import duty for cars to the EU. In a statement, the ministry said that “China has repeatedly pointed out that the EU’s anti-subsidy investigation on Chinese electric vehicles has many unreasonable and non-compliant aspects, and is a protectionist practice of ‘unfair competition’,” according to a Google translation. The EU launched an “anti-subsidy” investigation into Chinese EVs last year, alleging they were illegally subsidized and thereby “causes or threatens to cause economic injury” to the bloc’s EV industry. China has already filed a lawsuit under the World Trade Organization dispute settlement mechanism. The commerce ministry said “China will continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.” China’s commerce ministry also highlighted the EU has indicated it will continue to negotiate with China, adding that both sides are conducting a new round of consultations. It also expressed hope that the EU will “work with China in a constructive manner..., reach a solution acceptable to both sides as soon as possible, and avoid escalation of trade frictions.” On Oct. 25, Reuters reported the two sides were looking at possible minimum price commitments from Chinese producers or investments in Europe as an alternative to tariffs. Shares of Chinese EV makers were mostly lower in morning trading Wednesday, with heavyweight BYD trading close to the flatline while Nioand Xpeng lost 3.07% and 0.11% respectively.

Chinese carmakers challenge EU tariff plans 24 January 2025 Read next BYD dominates China’s PHEV market during November 23 January 2025 Read next What will happen to automotive residual values in 2025? 23 January 2025 Read next European EV deliveries down in November as BMW triumph 22 January 2025 Chinese carmakers challenge EU import duties, Trump’s potential tariffs, and automotive suppliers https://lnkd.in/gY9nc-N4

■ How Trump's Mexico tariffs could hurt Europe's auto industry! By Nick Carey, Reuters ■ Tariffs on Mexican imports could hit European carmakersVW, Stellantis among companies with big Mexican factoriesRamping up U.S. production would take timeAny tariffs on European imports would affect luxury cars most ■ LONDON, (Reuters) - Donald Trump's pledge to slap tariffs on imports to the U.S. from Mexico could be more damaging for European car makers like Volkswagen and Stellantis and their suppliers than any direct tariffs on EU goods, according to data, analysts and experts. U.S. president-elect Trump said he would impose a 25% duty on imports from Canada and Mexico until they clamped down on drugs and migrants crossing the border, a move that would appear to violate a free-trade deal between the three countries. ■ If implemented, the extra tariffs will raise questions about the future of global automakers' operations in Mexico, where many have built factories to take advantage of relatively cheap labour and close proximity to the lucrative U.S. market. Some could opt to boost operations in the United States and shift production from Mexico. Europe's luxury brands, which have neither U.S. nor Mexican production, will meanwhile be watching to see if Trump follows through with threats of European tariffs that would raise prices for U.S. buyers of their cars. ■ European carmakers with major operations in Mexico include Stellantis (STLAM.MI), and Volkswagen (VOWG_p.DE), whose shares fell 4.7% and 2% respectively on Tuesday. In a client note, Bernstein analysts said Trump's threats to apply tariffs soon after he takes office in January gave automakers and suppliers too little time to adapt to huge supply chain changes. "The ... ramifications for U.S. manufacturers of Mexico and Canada tariff(s) are so large, it seems difficult to contemplate that yesterday's announcement is more than a bargaining chip at this point in time," they wrote. ■ Automakers face a big hit when they are already struggling with a downturn in demand, rising costs, a slower-than-expected transition to electric vehicles and growing competition from Chinese rivals. ■ Nearly 80% of cars exported from Mexico between January and July this year went to the U.S. - some 1.57 million vehicles, according to the Mexican Automotive Manufacturers Association. For Stellantis, the world's 4th largest carmaker, every additional percentage point of duties on imports from Mexico could reduce pre-tax profits by about 160 million euros, or 1.4% of 2025 expectations, Intermonte analysts estimated. The German carmaker's U.S. business is far more exposed to Mexico than its European operations would be. Shipping data shows Volkswagen U.S. has imported around 10 times as much from Mexico so far this year than it has from Europe. VW and Stellantis declined to comment on Tuesday. Source: Reuters #Trump #Volkswagen #Stellantis #MotorIndustry #AutomobilIndusrty

𝐂𝐡𝐢𝐧𝐞𝐬𝐞 𝐄𝐕 𝐌𝐚𝐤𝐞𝐫𝐬 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞 𝐄𝐔 𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐚𝐭 𝐂𝐨𝐮𝐫𝐭 Key Points: o  Chinese EV giants BYD, Geely, and SAIC have filed legal challenges to the EU's import tariffs at the Court of Justice of the European Union (CJEU). o  The EU imposed tariffs on Chinese-made electric vehicles (EVs) in October after an anti-subsidy investigation, with BYD facing a 17% tariff, Geely 18.8%, and SAIC 35.3%, in addition to the standard 10% EU car import duty. o  The complaints were lodged with the General Court, the lower chamber of the CJEU, just before the deadline for filing challenges, marking the beginning of a legal battle that could take up to 18 months. o  The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), representing Chinese EV makers, has also filed a complaint, pushing for a compromise between Beijing and Brussels to avoid the tariffs. o  The European Commission is aware of the filings and has two months and 10 days to prepare its defense while continuing technical discussions with Beijing. 𝐖𝐡𝐲 𝐓𝐡𝐢𝐬 𝐌𝐚𝐭𝐭𝐞𝐫𝐬: o  These tariffs are a significant issue for Chinese EV makers entering the European market, as they increase the cost of their vehicles and could slow down their expansion efforts. o  The legal battle highlights the ongoing tensions between China and the EU regarding trade and market access, especially as the EU seeks to protect its own EV industry while simultaneously promoting the green transition. o  The Chinese EV makers argue that the tariffs are unfair, particularly since Tesla, a major competitor, was not included in the anti-subsidy investigation. o  The key legal issues at play involve the EU's assessment of subsidies provided to Chinese EV makers and the determination of whether these subsidies caused "injury" to the EU’s domestic EV sector. The manufacturers are likely to argue that the subsidies are legitimate and not harmful to competition. o  The outcome of this case could influence how trade relations are managed between the EU and China, particularly in industries crucial for the global transition to sustainable energy #EVIndustry #ChineseEVs #EUTradeDispute #GlobalTrade #LegalChallenges #Sustainability #ElectricVehicles #Tariffs #InternationalLaw #BusinessNews https://lnkd.in/eQtivSHc Disclaimer: The Content in this post is for informational purposes only derived from references and does not constitute any professional advice. We do not claim ownership of any data or Information referenced.

EU votes for new China BEV tariffs 🚘 European Union member states have approved European Commission proposal to impose new duties on imports of battery electric vehicles (BEVs) from China. The European Commission – the EU’s executive arm - said it has obtained the necessary support from EU member states for the adoption of the tariffs. This, it said, represents another step towards the conclusion of the Commission's anti-subsidy investigation. EU lowers proposed import duties on Chinese BEVs. However, it also said the EU and China would ‘continue to work hard to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission's investigation, monitorable and enforceable’. Reuters reported that ten EU member states backed the tariffs, with twelve abstentions. Germany was among five member states that voted against the China tariffs proposal. A European Commission investigation has concluded that Chinese-made BEVs have benefitted from unfair subsidies that make them cheaper than European made competition. The new China-specific tariffs for BEVs would be on top of the existing 10% tariff applying to all cars imported to the EU from countries that don’t benefit from separate trade agreements. However, Germany is reportedly concerned about rising trade tensions between the EU and China, especially in automotive trade. German OEMs have sunk big investment in manufacturing in JVs in China. “I am not a fan of countervailing duties because this will likely lead to countermeasures and involve us in a tariff dispute, perhaps a tariff war, with China,” German Economy Minister Robert Habeck said earlier this week, according to Reuters. “I am working to find a political solution that will not drive us into a tariff war with China.” A number of Chinese companies are also looking to set up manufacturing facilities inside the EU in order to avoid import tariffs. #tariff #eu #china