Additional tariffs are unlikely to deter Chinese electric vehicle (EV) companies from entering the European Union (EU) as their manufacturing and price advantages will make their products competitive abroad, industry officials said at the largest trade fair in the world.
These officials, speaking at the China International Import Expo (CIIE) in Shanghai, said mainland companies are able to offer the best pure electric cars at the best prices and their development and production capabilities are unmatched by international competitors.
“The superiority of Chinese automakers in electric car production can be replicated in other markets as they can respond to global consumer demand,” Sam Wu, CEO of Ford Motor China, said at the Hongqiao event on Wednesday Forum, which is part of the CIIE. . “China’s EV industry is in the pole position thanks to an early start and government support.”
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Two officials from major international automakers said some of their Chinese-made electric cars will be easy to sell in EU countries even after absorbing additional tariffs ranging from 17 percent to 35.3 percent.
Last month, the EU voted to impose tariffs on pure electric cars made on the continent, following an anti-subsidy investigation. The new duties are in addition to the standard 10 percent rate applied to pure electric cars made in China. The new rates will be in effect for five years.
Global brands including Volkswagen and BMW are also subject to the punitive measures because their mainland-built cars are assembled with partners such as state-owned SAIC Motor and Brilliance Auto.
Chinese EV makers have a major cost advantage over their global rivals as they benefit from a fully developed supply chain and strong manufacturing strength, said Stephen Dyer, co-leader of Greater China and head of the Asia automotive practice at global consultancy AlixPartners . Pure electric cars made in China cost 35 percent less than cars assembled in other markets, he said in July.
In a teardown report last year, UBS said BYD, the world’s best-selling EV maker, had a 25 percent sustainable cost advantage over traditional EU brands. BYD faces an additional 17 percent EU tariff if it exports its mainland-built cars to the bloc.
Yin Tongyue, chairman of state-owned Chery Automobile, told the forum on Wednesday that Chinese automakers would not prosper without integrating into the global supply chain.
“Chinese EV manufacturers would not be able to make rapid progress from the very beginning if we did not have access to the best technologies and the global automotive supply chain,” he said. “I think synergy with global partners and sustainability are key for Chinese players as we try to maintain our advantages.”
Xpeng, a Chinese maker of premium EVs, said on Wednesday it was in discussions with its European dealers about how to avoid the tariffs.
“Europe is a market we attach great importance to,” said Brian Gu, vice chairman and co-president of Xpeng. “As a company, we need to actively consider what types of models we can offer locally, what business strategies we should adopt and whether we can make greater investments in the region to address these challenges.”
In the EU, SAIC faces the highest tariff of 35.3 percent, while Geely Auto faced an additional tariff of 18.8 percent. Other Chinese car manufacturers will have to absorb a tariff of 20.7 percent.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice covering China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook page Tweet pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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