EC imposes tariffs on China EV imports

EC imposes tariffs on China EV imports

EC imposes tariffs on China EV imports 150 150 Batteries International

July 5, 2024: The European Commission announced yesterday that, as previously threatened on June 12, it had imposed provisional tariffs on ‘battery electric vehicles that benefit from unfair subsidization’. 

The EC had earlier said it was prepared to explore possible ways to resolve the issues identified in a WTO-compatible manner but no resolution of the issue had happened.

The most expensive part of any electric vehicle is always its lithium battery. The imposition of tariffs, and slower EV sales, could have a major impact on the price of lithium batteries if a glut of them were to be dumped onto the European market, again potentially prompting a further extension of tariffs being extended to batteries.

Sample individual duties the Commission will impose on Chinese car producers are based on its evaluation of the subsidies that they have received and are variable. For BYD the EC suggested an extra 17.4% (it already pays a tariff of 15%); For GEELY, 20% and for SAIC Motor, 38.1%.

 The level of tariff is also related to whether Chinese car makers had cooperated with an EV investigation last October. If they did, the average weighted duty was 21% and for EV producers that did not cooperate it was 38.1%.

A final levels of the tariffs will be finalized in November. They will, as is typical with such rulings, probably last for five years.

The Commission has previously said the PRC subsidies “pose a threat of economic injury to European EV producers: these have allowed the subsidized imports to rapidly increase their market share in the EU to the detriment of the Union industry.”

On May 14, US president Jo Biden said, when raising the EV tariff rate from 25% to 100%, “China’s government has used unfair, non-market practices.

“Its forced technology transfers and intellectual property theft have contributed to its control of up to 90% of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care — creating unacceptable risks to America’s supply chains and economic security.”