Will EU tariffs keep out Chinese EV’s?

By the end of October this year, the European Union will make a final decision on trade against China. Automakers and countries are divided over whether to place tariffs of 36.3% — on Chinese electric vehicles.

This would hurt German automakers, who have a substantial automotive trade surplus with the country. On the contrary, Italian and French automakers have no presence there. The main issue is that the Chinese government has continued to subsidise industries which it relies on for export revenue – e.g. the EV sector. However with subsidies comes overproduction and that surplus stock gets dumped on the rest of the world at a price lower than that of domestic producers.

Chinese automakers can produce a car for about $5,500 while it costs European automakers closer to $20,000. But the Chinese sector achieve much higher economies of scale than its EU counterparts. It’s explained by lower labour costs and by the fact that when it’s about electric cars, China, unlike the rest of the world, it has already secured the supply chain for the batteries. Video below is worth a look.