Brussels’ decision to impose tariffs on Chinese electric vehicles will impact companies such as BYD Co (OTC:BYDDF) and SAIClike Tesla Inc (NASDAQ:TSLA), which produces in China.
Starting next month, the European Commission plans to apply provisional duties of up to 25% on imported Chinese electric vehicles, aiming to counter the subsidies that Chinese manufacturers receive from their government.
This measure could escalate to around 35%, significantly lower than the 100% tariffs applied by the US, the Financial Times reports.
Also read: Nio, XPeng and Li Auto rise in sales with aggressive discounts amid market pressure
Chinese EV companies including NIO Inc (NYSE:NIO) and Li Auto Inc (NASDAQ:LI), traded lower on Wednesday after the report. XPeng Inc (NYSE:XPEV) The stock price was unresponsive.
The tariffs, championed by France and Spain, are expected to raise more than $2.15 billion (2 billion euros) annually for the EU budget as Chinese sales of electric vehicles in Europe grow.
In 2023, China exported $10.76 billion (10 billion euros) worth of electric cars to the EU, FT noted.
The Kiel Institute, an economic think tank, suggests that an additional 20% tariff could reduce imports of Chinese electric cars by a quarter, cutting about 125,000 units from the 500,000 vehicles imported in 2023.
In 2023, Germany alone exported 216,299 cars to China, a 15% decline from the previous year.
Volvo Auto AB (OTC:VLVCY) recently migrated EV production to Belgium to avoid EU tariffs.
Earlier in May, Mercedes Benz Director Ola Källenius urged the EU to reduce tariffs on electric vehicles imported from China.
China is Tesla’s largest market after the US and accounted for 33% of global sales in 2023, according to CNN Rho Motion.
Price promotions: NIO shares were trading 3.14% lower at $4.32 premarket at last check on Wednesday.
Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
Photos via Shutterstock
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This article What’s going on with Chinese EV stocks Nio, Li Auto and XPeng on Wednesday? originally appeared on Benzinga.com
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