A short distance away from the trade war between the European Union and China.  Will electric car prices rise?

European Commission It is considering imposing temporary tariffs on Chinese electric cars Because of the “unfair subsidies” that Beijing provides to companies in this sector – we read in the European Commission statement. According to the Commission, the subsidies pose a risk to producers in the European Union. China, in turn, opposes potential tariffs and warns against taking measures to protect its own interests.

Why would society consider such a decision? China is the world’s largest producer of electric cars. In 2023, its global exports in this sector increased by up to 70%, reaching US$34.1 billion. The European Union is responsible for nearly 40 percent. Chinese exports of electric cars, making it the largest importer of them.

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Last year, Europeans bought Chinese electric cars worth a total of 3.5 billion euros, almost 40 percent more. More than a year ago. Brussels and some European Union capitals are concerned by the fact that prices for electric cars from the Middle Kingdom are usually 20 percent higher than their own. Lower than the prices of models produced in the European Union.

High tariffs may hurt consumers

Piotr Krzysztowicz from the PKO BP Analysis Department said in an interview with money.pl that it is difficult to predict today what effects the increase in tariffs will bring on Chinese electric cars. – Usually all tax changes eventually affect the client anyway. He explains that it is therefore logical to question the extent of the impact of imposing customs duties on the prices of imported vehicles.

If the EU imposes tariffs on Chinese electric cars, the price of these currently cheap cars will rise. He adds: That’s why you have to ask whether the customer will accept it or not.

According to PKO BP analyst, the data clearly shows a change in trends. – Looking at the outstanding industry, we can say that We buy more and more expensive cars. In addition, the government subsidy system can offset purchases in the electric vehicle sector, making it less of a financial burden on the customer, he says.

I can imagine that the customer will not just accept the price increase and buy a new electric car, but may even choose a European brand. Therefore, it is not certain that higher tariffs will significantly discourage consumers from buying, he says.

Will China respond with its own tariffs?

– When it comes to cars, yes Tariffs are unlikely to hamper the development of electric mobility. From 2035, there will be a ban on the registration of new combustion cars in the European Union. In addition, ongoing technological changes and development of charging infrastructure equalize the prices and costs of using electric cars compared to combustion cars. This works in favor of the battery sector. Therefore, it is difficult to expect that tariffs will change the structure of imports In favor of combustion engines – says Piotr Krzysztowicz.

In his opinion, it is expected that if the tariffs lead to an increase in the prices of Chinese electric cars, then This will improve the competitiveness of European brands. – It is still a mystery how China will react and how this will affect the market. Maybe they will impose tariffs on cars imported from us, maybe they will redirect exports to other markets, or maybe they will start opening their factories in Europe – comments the PKO BP expert.

The United States attacked Chinese competition

According to Piotr Krzysztowicz, EU declarations – because they are not yet decisions – can also be viewed from a different perspective. – The United States has long imposed tariffs on Chinese electric cars. both. The expert points out that although not many of them will go there, they will increase tariffs on Chinese electric cars by up to four times this year.

This may be a good example of effective action in the war against Chinese expansionismHe concludes that the European automotive industry undoubtedly needs decisive action today.

New regulations in July?

Will the tariffs finally take effect? This is not yet known. The European Commission said it had asked the Chinese authorities to reach an agreement on subsidies and customs duties. Only if negotiations with Beijing fail will the EU impose temporary tariffs from July 4, Polish News Agency reported.

Brussels has reservations about specific brands. According to the European Commission, individual fees should apply to BYD (17.4%), Geely (20%) and SAIC (38.1%). Other Chinese electric vehicle manufacturers that cooperate in the commission’s investigation will be subject to a 21% fee, and those who refuse to cooperate will be subject to a 38.1% fee.

The first mentioned companies are planning to expand in Poland. BYD confirmed at the end of May that it will open a branch in our country. ISBnews reported that the first three models of electric cars will be available for pre-order starting in June, with delivery starting at the end of August.

Tariffs may restrict imports from China

Experts say the restrictions imposed by the European Union may be effective. The Kiel Economic Institute estimates that imposing an additional 20% tariff on Chinese electric cars would reduce their imports to the EU by a quarter.

Brussels also has other arguments. The European Commission is investigating China’s support for electric car manufacturers. It began in October 2023. European Commission President Ursula von der Leyen, in her State of the Union address last year in the European Parliament, spoke of “global markets being flooded with cheaper electric cars, the prices of which have been artificially reduced thanks to massive government subsidies.”

China responds

Beijing did not leave the European Commission’s announcement without comment. The Chinese Foreign Ministry warned on Wednesday that China will take “all necessary measures.” To protect its interests if additional tariffs are imposed on Chinese electric cars. Ministry spokesman Lin Jian said such a move would be “contrary to the principles of market economy and international trade, and will undermine China-EU economic and trade cooperation and the stability of global automobile production and supply chain.”

The Polish News Agency quoted the Chinese Ministry of Commerce calling on the European Union to “properly resolve economic disputes” and “immediately eliminate inappropriate measures.” The Ministry stressed that it expects the European Union to “maintain its commitment to supporting free trade, opposing protectionism, and cooperating with China in order to preserve the general interests of economic and trade cooperation.”

In 2023 As many as one in four electric cars sold in the European Union came from China. Experts cited by the agency point out that the EU’s notorious trade deficit with China, which exceeds about 400 billion euros annually, is mainly caused by unequal mutual market access and unfair practices on the part of Beijing, including extensive government subsidies. .

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