China Warns that Tariffs on Electric Vehicles Pose "Enormous Risk"

The China Association of Automobile Manufacturers (CAAM) has issued a statement firmly opposing the revision of tariffs on Chinese electric vehicles. The new rates are somewhat less severe than those originally proposed and which came into provisional effect on July 4.

However, the draft appears to be a step towards making these rates permanent in November—something that could happen if no agreement is reached between Brussels and Beijing or if member countries do not oppose it, which seems unlikely.

The organization asserts that the tariffs entail "enormous risks and uncertainty" for the operations and investments of Chinese companies in the European Union, suggesting that some brands looking for locations for their factories might reconsider their plans. BYD, China's largest vehicle manufacturer, has been open about its intentions to build a plant in Hungary, and Zeekr, part of the Geely Group, has also shown interest in doing so to avoid additional import costs.

CAAM claims that Brussels' decision "will have a severe adverse effect on the development of the European automotive industry" and will reduce employment opportunities as well as the development of sustainable mobility.

The new rates represent a general reduction of around one percentage point. BYD would face a 27% tariff, Geely 29%, and SAIC 46.3%. The BMW Group, through its joint venture, will receive a 31.3% rate for its electric Mini, while Tesla, which originally faced a 30.8% tariff, will now see it reduced to 19%.