The European Union (EU) is set to vote on whether to impose significant import taxes on electric vehicles (EVs) from China. The proposed tariffs aim to protect the European car industry from what EU lawmakers consider unfair Chinese state subsidies that give their cars a competitive edge.
If approved, tariffs as high as 45% could be placed on Chinese-made EVs for the next five years. However, concerns have been raised that such a move could lead to higher prices for European EV buyers.
This decision risks escalating tensions between Brussels and Beijing, with China criticizing the tariffs as protectionist. China has been relying on high-tech exports, like electric cars, to boost its struggling economy, and the EU is a key market for these products.
China’s auto industry has grown rapidly, with its brands expanding internationally, sparking fears in Europe that they may outcompete local manufacturers due to lower prices.
The vote comes after the EU imposed varying import tariffs on Chinese manufacturers earlier this year, but this vote will determine if they are enforced. The European Commission has set duties based on estimates of how much state aid Chinese automakers like SAIC, BYD, and Geely have received.
In August 2024, EU registrations of battery-electric cars dropped by 43.9% compared to the previous year. In contrast, the UK saw record demand for EVs, driven by commercial deals and manufacturer discounts.
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EU members are divided on the tariffs. Germany, whose car industry depends on exports to China, is likely to oppose the move, with Volkswagen stating that the tariffs are “the wrong approach.” Meanwhile, France, Greece, Italy, and Poland are expected to support the proposal. For the tariffs to be blocked, a qualified majority of 15 EU members must vote against them.
SAIC, which owns the MG brand, has announced that it will not change its EV prices this year, regardless of the outcome of the vote.
