Despite the voices against the automotive industry since countries like Germany and Spain have tried to avoid it, on the 4th the EU gave the green light to the definitive tariffs on electric cars that are imported to Europe from China. Beijing’s response has not been long in coming, although both parties continue negotiating.
It was hoped that tensions could be reduced with measures such as a minimum price mechanism for Chinese electric cars. However, according to exclusive information to which Reuters has had access, Brussels has already rejected a proposal from the Chinese Government for its cars They are sold at a minimum price of 30,000 euros in our market.
“Minimum prices of 35,000 to 40,000 euros could be a more appropriate starting point”
According to information accessed by Reuters from various sources, It has been a month since the European Commission rejected the offerof minimum prices proposed by China, a measure that Beijing hoped would avoid the imposition of tariffs by the EU that will take effect next month.
This information only adds fuel to the fire of what began as an investigation into unfair competition and measuresanti-dumpingwhich has ended up plunging China and Europe into their biggest trade conflict in a decade.
Everything exploded at the beginning of the year: with abnormally cheap prices, Chinese electric car manufacturers threatened to flood the global market, putting the automotive industry at a critical point. To put a stop to what they considered “unfair competition”, both in the US and the EU, the response was to impose tariffs to increase the price.
In our market, the final taxes were confirmed just a few days ago, but China has already responded with investigations into the large-displacement European cars that are exported there from Europe and to products such as brandy European. The European industry hoped that tensions could be reduced with measures such as establishing minimum prices.
According to JATO Dynamics data from 2023the average price of a battery electric vehicle in China is approximately 32,000 euros, although cars like the BYD Seagull, which sell for less than 10,000 euros, highlight the competitiveness of Chinese manufacturers. This is because China controls virtually the entire supply chain and manufacturers benefit from generous subsidies from the Chinese government.
In contrast, the average price of an electric vehicle in Europe according to analysts already amounts to about 66,000 euros. Most of the most economical models, which are around 20,000 or 25.00 euros, they are not expected to hit the market until 2025. Volkswagen, for example, plans to launch a model of this price in 2027.
According to Reuters, faced with the Chinese proposal for competitive prices, Brussels would have expressed that it is not only about the sales prices, but also from the subsidies that manufacturers receivewhich makes fair competition difficult.
Likewise, manufacturers such as SAIC and BYD are positioning their electric models in Europe around and above 30,000 euros, even though they are sold at a fraction of that price in their country. Now, the scope to avoid tariffs appears increasingly limited.
If nothing changes, the Commission has already announced that, starting October 31, tariffs of up to 45% will be imposed on electric vehicles manufactured in China, unless an alternative agreement is reached. The Chinese Ministry of Commerce has already expressed its desire to “negotiate a flexible pricing commitment,” although without providing specific details.
The Commission has shown a willingness to reconsider other price commitments, suggesting the possibility of establishing “an individual minimum price per manufacturer and model”, but minimum prices of 35,000 to 40,000 euros “could be a starting point more suitable for talks,” according to Reuters sources.
As deadlines for negotiations approach, it is crucial for both sides to find an agreement to avoid the imposition of definitive tariffs that could affect competitiveness in the global market. It seems complicated, since the solution for China is to reduce costs and margins among European manufacturers to reduce the current average price of electric cars, while Europe, without so many benefits for its manufacturers, aims for the opposite.
Source: www.motorpasion.com
