Penalties for electric cars - an overview!

Trade relations between Europe and China are particularly tense in the area of ​​electromobility. Europe has introduced punitive tariffs on electric cars from China to compensate for unfair trade practices and state subsidies in order to avert impending damage to Europe. The tariffs are intended to level the playing field and protect the domestic automotive industry in Europe. However, it is not only Chinese manufacturers who are directly affected by the tariffs, but also companies such as Tesla, BMW and other European car manufacturers that produce in China and export their vehicles to Europe.

The duties vary depending on the manufacturer:

• BYD : 17.4%
• Geely : 19.9%
• SAIC : 37.6%
• Other cooperating manufacturers : 20.8%
• Non-cooperating manufacturers : 37.6%

The introduction of punitive tariffs on electric cars produced in China by all manufacturers has far-reaching consequences for the market. Companies that import these vehicles are faced with higher costs. It can be assumed that these additional costs will be passed on to the end consumer, which could lead to higher prices for electric cars.

Indirectly, European manufacturers benefit from the tariffs as they receive a certain degree of protection from cheaper Chinese vehicles. This could strengthen the competitiveness of the European electric car industry. In addition, the punitive tariffs could affect the production strategies of the companies affected. Manufacturers could relocate their production facilities or develop new strategies to avoid the additional costs. For example, Chinese manufacturers could consider building production capacity in other countries to avoid the tariffs and secure their market presence in Europe.

In summary, tariffs will have both short- and long-term effects on the electric car industry. While they may protect the European market in the short term, they could also lead to a restructuring of global production networks and higher costs for consumers.

Shortly after announcing possible tariffs in June 2024, Tesla announced a price increase for its Model 3, which is produced in China. Prices have been raised by 1,500 euros, but this does not yet reflect the amount of the actual tariffs that Tesla is likely to have to pay. The base model of the Model 3 now costs 42,490 euros, the Long Range version 51,490 euros and the Model 3 Performance 58,490 euros.

The provisional countervailing duties will apply for a maximum of four months from July 5, 2024. Within this period, definitive duties must be decided by vote of the EU member states. Companies have the opportunity to comment and request a hearing before final measures are decided.

So not much has really been decided yet, because the final punitive tariffs do not have to be paid until the beginning of November. Until then, there is time for adjustments and negotiations with the Chinese government. The German automotive industry in particular fears retaliatory measures that could make it even more difficult to sell their premium models in China. Since July 4, however, importers have had to deposit securities that will be collected if the provisional tariffs remain in place.

The punitive tariffs on electric cars between Europe and China pose a major challenge for the automotive industry. They are intended to combat unfair trade practices and protect the domestic industry, but have far-reaching effects on the pricing and production strategies of the companies affected. It remains to be seen how companies and governments will respond to this challenge in order to find long-term solutions that both promote competition and stabilize the market.

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