The European Commission is poised to announce import tariffs on electric cars from China this week, in response to alleged heavy subsidies provided by the Chinese government to the sector. This move could spark a counter-reaction from China, potentially impacting European car manufacturers who rely on the Chinese market for sales and import cars made in China.
Volvo, largely owned by Chinese company Geely, is already taking steps to mitigate the impact of the EU decision. The manufacturer plans to move part of its production to Belgium, allowing it to bypass the import tariff on models such as the EX30 and EX90. Initially, Volvo had planned to stop selling these models produced in China, but the group has now opted to relocate production.
The US recently quadrupled tariffs on electric cars from China to 100%, but it is not expected that Brussels will follow suit. The levy will apply not only to Chinese car manufacturers like BYD and Geely but also to companies like Tesla that export cars from China to the European market.
German car manufacturers, in particular, are concerned about a potential counter-reaction from China. They rely heavily on the Chinese market for sales and also import cars made in China under their own brand. The EU’s decision to impose tariffs on electric cars from China could have significant implications for these manufacturers.
