EU tariffs on Chinese electric vehicles, introduced to protect European automakers, could have the opposite effect.
A year after the EU imposed punitive tariffs of up to 35% on Chinese electric vehicles — in addition to the standard 10% import duty - Chinese automakers have dramatically expanded their presence in Europe, with total sales up 93% this year, according to Automotive News.
Although uncertainty about these measures initially slowed growth in 2024, brands such as BYD, MG, and Chery have adapted quickly, moving from battery-powered electric vehicles to plug-in hybrids, full-fledged hybrids, and models with internal combustion engines that are subject only to the standard fee. As a result, the Chinese market share doubled year-on-year to about 7% by October, and total sales in the EU, UK, and EFTA are expected to exceed 700,000 units, up from 408,000 in 2024.
Analysts argue that the EU's approach to tariffs, targeting specific technologies and companies, has left significant loopholes, unlike the overall 100 percent tariff imposed by the US, and has inadvertently boosted exports from China rather than stimulating European production. Since manufacturing costs in China are 20-30 percent lower than in Europe, most original equipment manufacturers can cover the standard tariff, while overcapacity in the domestic market, a fierce price war, a weak supplier ecosystem in Europe, and uncertain incentives are holding back local investment.