PARIS (Reuters) – EU tariffs on Chinese-made electric cars will hasten the closure of factories in Europe by local carmakers, as tariffs will push Chinese manufacturers to build factories in Europe, exacerbating overcapacity problems, the CEO of Stellantis Monday.
European governments, including Italy, are trying to attract Asian automakers as the companies expand their commercial presence in the region.
By producing cars in Europe, they could, under certain conditions, avoid European Union tariffs on electric vehicles.
Tariffs are a “good communication tool” but have side effects, Stellantis CEO Carlos Tavares said at the Paris Motor Show.
“It increases the overcapacity of Europe’s production system. The way to avoid customs duties is to build in Europe,” he added. “You are accelerating the need to close factories.”
Speaking to Italian media, Tavares mentioned the case of Chinese EV giant BYD, which is building its first European assembly plant in Hungary.
“Chinese carmakers will not go to Germany, France or Italy to build their cars because they would have cost disadvantages there, starting with energy costs,” he said.
Rome, which has been at odds with Stellantis over declining production in Italy, has said it is in talks with Asian carmakers about possible production investments, including China’s Dongfeng and Chery Auto.
(Reporting by Florence Loeve; Writing by Giulio Piovaccari; Editing by Cristina Carlevaro and Mark Potter)
