Ursula Von der Leyen wants to implement a tax to regulate imports of Chinese electric cars into European territory. Several analysts report that this threat from the European Commission absolutely does not intimidate Chinese manufacturers.
Chinese manufacturers are calm
The French government and European states in general are pushing for the establishment of a tax on Chinese electric vehicles. An investigation has been opened by the European Commission into subsidies granted to Chinese models. Ursula Von der Leyen believes that “ Chinese electric car prices are kept artificially low by huge government subsidies » and that “ distorts our market “. Nothing to worry Beijing about.
Since this announcement, many analysts have taken to their pens to say that this possible tax would probably only have a limited impact on the sales of Chinese manufacturers in Europe. The European Union’s position was expected, but the real impact will be relatively weak. The outlook for Chinese automobile companies enter international markets remain intact » according to the firm Sinolink Securities.
Cheap electric vehicles, really?
China has been expecting possible taxes since April. The European Union cited the price “ cheap Chinese electric vehicles » to justify the opening of an investigation. The brands concerned specify that vehicles exported to Europe cost on average almost double the price in China. The BYD Seal, for example, starts at 44,990 euros (excluding bonuses) on European soil. Or around 350,000 yuan, compared to 189,800 yuan in China.
Same thing for the BYD Atto 3, the European price of which is around 43,690 euros (excluding bonuses). The BYD Han starts at 72,000 euros. High prices “ which do not go in the direction of the allegations of the President of the European Commission » according to Chinese analysts. They also believe that exports from Chinese manufacturers to Europe are very modest. Between January and July, 89,000 units were sent to European countries.
A European discourse with double standards
This represents only 4.8% of sales outside China. Chinese brands are also exported to Brazil, Thailand, Russia, Turkey, the United States and Mexico. To prepare for possible European sanctions, Chinese companies have already found the solution: setting up factories in Europe. Some manufacturers are already working on this. BYD, for example, is looking for the ideal place to build a factory and France is even among the countries selected by the manufacturer.
The government wants to roll out the red carpet for the Chinese brand. Two weights, two measures. On the one hand, the European Union is seeking to put obstacles in the way of Chinese manufacturers. France in the lead with future changes to the ecological bonus. On the other hand, European states are fighting to bring Chinese brands to their soil and convince them to set up factories there. In short, the outlook for Chinese electric car sales remains good.
What fate will be reserved for European brands?
Office Zhongtai Securities adds that “ the likelihood that the European Union will introduce customs duties is not high » and that, even if she does, “ the impact on sales and performance of Chinese automakers will not be very significant “. Another possible consequence of a possible tax: a backlash for Europeans in China. Germany, Europe’s largest automaker, opposes any punitive measures.
European brands could in turn suffer the consequences of this trade war on the Chinese market. Enough to nullify Volkswagen’s efforts to establish itself in the Chinese market. The German brand is doing everything to make its mark in China. In particular by forging partnerships with local players like Xpeng and SAIC.
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