A great uproar was caused in in recent days, the introduction of provisional duties on imports of Chinese electric vehicles into the European Union. The Automotive Industry Association (AutoSAP) does not like the decision of the European Commission (EC) to impose tariffs on imports of electric vehicles made in China, at the rate of an additional 17.4 to 38.1 per cent (i.e. on top of the existing 10 per cent).
By imposing provisional tariffs, Europe followed the US, which took such a step in the spring. According to the Executive Director of AutoSAP Zdeňka Petzla but Europe is not in the same position as the United States. "Europe has not taken many of the steps that the US has taken. They very quickly lured investment in clean mobility, in battery factories, in building plants, in mining raw materials. Europe has not done that. To think that imposing tariffs is going to solve this would be very disingenuous," he argues.
"Countervailing duties are generally not suitable for strengthening the long-term competitiveness of the European automotive industry - we reject them. The timing of the European Commission's decision is unfortunate given the current weak demand for battery electric cars in Germany and Europe. The negative impacts of this decision outweigh the potential benefits for the European automotive industry," said Škoda Auto's Head of Communications Tomas Kotera.
Some European car companies, including the biggest one - the German Volkswagen Group - are also against it. "The timing of the EC's decision is detrimental to the current weak demand for electric cars in Germany and Europe. The negative impacts of this decision outweigh any benefits for the European and especially the German car industry," commented on the decision by a VW spokesperson via Reuters.
The German Association of the Automotive Industry also disagrees. The big manufacturers fear that China will retaliate and make it more difficult for them to import into the huge Chinese market. According to an analysis by Reuters, such retaliation would fall most heavily on Mercedes-Benz, BMW, Ferrari and Volkswagen and Porsche. And HSBC estimates that German carmakers generate more than a fifth of their global profits in China.
EU customs measures are the most effective, according to the General Secretary of the Central Committee of the Communist Party of Czechoslovakia Romana Blaška unilateral and not conducive to economic and trade cooperation between China and the EU. "The EU's tariff behaviour violates the principles of the International Trade Organisation (WTO) and any countermeasures by China will ultimately have an impact on the European economy," Blaško added.
A systemic approach is needed
The introduction of new tariff measures will certainly be felt by Chinese manufacturers and may slow down their expansion, but AutoSAP does not expect this to have an impact on subsidy policy in China. However, Petzl warns that the impact of the measures could be significant: "If we make electric vehicles more expensive for China, it could very easily take a toll on the supply of other raw materials that we can't do without when we have set such stringent electrification targets."
Companies currently producing EVs for Europe in China can certainly adapt and continue to penetrate the market, whether through local investment, collaboration with local partners or by moving production to other countries.
"We believe that anti-subsidy measures alone, such as additional tariffs, will not solve the problems facing the automotive industry. Instead, we need a systemic approach that will promote the strengths of the European industry, which will increase its competitiveness and open up new markets,"says Petzl on behalf of the Czech automotive sector. According to him, the EC should come up with an industrial strategy for the EU and, in cooperation with individual Member States, improve the overall business environment with an emphasis on supporting innovation in the automotive industry. At the same time, ways must be sought to increase the continent's self-sufficiency in the supply of critical raw materials and components. The regulatory framework within which car manufacturers operate should be just strict enough to allow individual operators to operate and grow freely within it.
What do the statistics say?
Agency Bloomberg citing data from research firm Dataforce said Chinese brands achieved a record 11.1 percent share of European EV sales in June, up 2.4 percentage points from May.
According to sales statistics of the Society of Automobile Importers (SDA) 62 Chinese vehicles of Dongfeng (DFSK), Forthing, FAW and SWM brands were sold in the Czech Republic in the first half of this year; however, mainly 2041 units of the now Chinese MG brand were sold. It has thus reached the 14th place among all imported brands, leaving behind such famous names as Opel, Seat, Citroën, Suzuki, Audi, Tesla, Mazda, Nissan, Mitsubishi, Honda, not to mention the declining Fiat (329 units) and Jeep (230 units). For MG, that's double the year-on-year increase, and for Forthing it's even 537 per cent - it sold eight cars in the first half of last year, 43 this year. "So far this year, a total of 2,103 Chinese cars have found their owners, 131 - or 6.2 per cent - of which were electric vehicles, so most of the buyers were attracted by conventional combustion engines." Balancing Petr Vanecek, joint CEO of AURES Holdings, the operator of the international network of AAA AUTO and Mototechna car dealerships.
Developing its own market and helping Europe
"The current evolution in production and market saturation in electric vehicles is happening at an incredible pace. When I was in China in 2019, I was amazed at how far China is in this area, almost all small motorcycles had an electric motor. They are quiet, reliable and most importantly, environmentally friendly. And EVs were less than a third of the vehicles in use then. Today there are more than half! That's simply amazing, I don't know of another country that is developing its own market so dynamically and helping Europe in a major way," emphasized Blaško.
And he immediately gave an example: 'It is no coincidence that during Xi Jinping's visit to France and meeting with President Emmanuel Macron on May 6, an agreement was signed between the French automotive industry and the French government, where they affirmed a common goal of no return."
Blaško recalls that by writing off the 2024-2027 Strategic Automotive Contract, the signatories are committing themselves to a path to all-electric propulsion, taking with them an entire ecosystem worth 350,000 jobs and €50 billion in exports. The French Minister for Economic Affairs himself Bruno Le Maire Confirmed: "Together with the President of the Republic, we have decided to turn to electric vehicles. We don't want to go back. On the contrary, we want to speed things up."
"By 2027, France wants to sell 800,000 electric cars, up from 300,000 last year. And I'm not talking about the investments of both countries. The Czech Republic will be hit much harder than we can imagine. I personally am very much in favour of this, because it will ultimately be a huge benefit for the Czech car industry and society in general," Blaško concluded.
CMG / gnews.cz-jav_07
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