Intense concern and reflection from all the high-ranking executives of the European automobile industry in their statements at the exhibition center where the Paris Motor Show is held, with the managing director of Stellantis, Carlos Tavares, stating that the European Union’s new tariffs on Chinese electric cars will accelerate factory closures in Europe by local carmakers because they will push Chinese companies to build factories on our continent, exacerbating overcapacity problems.
Tavares stresses that tariffs are a good communication tool, but they have side effects, saying:
Tariffs increase the excess capacity of Europe’s manufacturing system. The way to avoid customs duties is to manufacture in Europe. Thus, the need to close factories in Europe accelerates.
Continuing, Tavares referred to the case of BYD, which is building its first European factory in Hungary, adding:
Chinese automakers won’t go to Germany or France or Italy to make their cars because they would have cost disadvantages there, starting with energy costs.
BYD’s executive vice president, Stella Li, criticized the tariffs, and said her company plans to build almost all the cars it sells in Europe at its plant in Hungary, which will open by 2025. BYD plans to produce parts in Europe and assemble the battery packs in its European factories in Hungary and Turkey, importing only the battery cells from China.
Continuing, Li stressed that BYD has not yet decided whether to pass on the cost of the tariffs (17% for BYD, on top of the existing EU tariffs of 10%) to consumers or absorb them itself, with the Chinese company adding that he did not expect BYD to be able to sell cars in Europe with a price below 30,000 euros.
Tavares also spoke about the slowing of the transition to EVs, specifically saying;
Making a transition to electric vehicles in more time is a big pitfall. This is because automakers will have to contend with higher costs as they have to invest in both electric and combustion engine vehicles.
When you make a longer transition, you are not actually replacing the old world with the new. You add the new world to the old.
Source: www.autoblog.gr
