China has ordered its automakers to halt substantial investments in European Union (EU) countries that approve additional tariffs on Chinese-built electric vehicles, Reuters reported, citing sources.
This directive follows the implementation of new EU tariffs of up to 45.3%, which were introduced after a year-long investigation.
On October 10, Chinese automakers, including BYD, SAIC and Geely, were informed at a Commerce Ministry meeting to suspend their large-scale investment plans, such as building factories, in the countries that support the tariff proposal.
The Chinese government’s decision to halt some investments in Europe signals an attempt to influence discussions with the EU on alternatives to tariffs.
The aim is to prevent a significant decline in EV exports to this crucial market.
Europe accounted for more than 40% of China’s EV exports in 2023, and with current 100% tariffs on Chinese-made EVs in the US and Canada, a drop in exports to Europe could alleviate the overcapacity problems faced by Chinese automakers at home. country can worsen.
Italy and France, despite their plea for investment from Chinese carmakers, have expressed concerns about the impact of cheap Chinese electric vehicles on European manufacturers.
Chinese state-owned SAIC is in the process of selecting a site for a new EV factory in Europe and has plans to set up a parts center in France.
At the same time, Italy is negotiating with car manufacturers, including Chery and Dongfeng Motors, about possible investments. BYD is building a branch in Hungary and is considering moving its European headquarters there for cost reasons.
This week, the EU and China agreed to continue technical discussions on possible alternatives to tariffs on electric vehicles produced in China.
Although the European Commission has held eight rounds of technical talks with Chinese officials, it said “significant remaining gaps” remain.
‘China orders automakers to halt investment in EU countries that support EV tariffs’ was originally created and published by Investment Monitor, a brand owned by GlobalData.
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