News / EU tariffs on Chinese EV imports not expected to put the brake on sales

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The EU imposition of tariffs on Chinese electric vehicles this month is not expected to significantly dent export volumes to the continent, according to a Clarksons report.

Even with the tariffs, Chinese EV brands remain competitively priced in Europe, compared with European brands.

Depending on manufacturer, the tariffs range from 17% to 38% – on top of the standard 10% tariff on imports of Chinese-made cars.

Chinese auto makers could also circumvent the tariffs by shifting more production to Europe, or to countries that have free trade agreements with the EU – only this week, Chinese EV manufacturer BYD broke ground on a $1bn production plant in Turkey.

And any tariff effects on China’s seaborne car trade could be alleviated by the growth in its EV exports to other regions, particularly South-east Asia.

The report notes: “A number of underlying drivers of growth in car trade remain (also in car-mile terms), including rebounding car production post-Covid, growing incomes in developing economies…and growing uptake of EVs/hybrids in key regions (including as a result of government policies/support) driving additional car sales.”

Chinese seaborne car exports reached 4.4m in 2023, up from fewer than one million pre-Covid.

Clarksons pointed out that, while EU car exports to China trumped pre-Covid China car exports to Europe – especially luxury makes like Mercedes and BMW – the tables have turned. Just under 800,000 Chinese cars, mostly EVs, were exported to the EU last year, compared with fewer than 400,000 European cars exported to China.

And while the US has effectively doubled the selling price of a Chinese EV by raising its tariff from 25% to 100%, the impact has also proved minimal, as the market share of imported Chinese EVs in the US is less than 1%. Furthermore, China’s EV makers can avoid the tariff by moving production to Mexico.

They have also turned their attention to South-east Asia: BYD opened its first EV factory in the region on 4 July, in Thailand.

The move coincides with China president Xi Jinping’s call to boost collaboration with emerging economies in Africa, Asia and South America.