JAKARTA - When the European Union imposes additional tariffs on Chinese-made electric vehicles by the end of 2024, the move is expected to be able to slow the rate of entry of competitively priced cars from the country into the European market.
However, many Chinese automotive manufacturers have instead shifted their focus to plug-in hybrid vehicles (PHEVs), which are now recording significant sales growth in the region. According to a report by German business daily Handelsblatt, Brussels is preparing a new trade measure targeting Chinese plug-in hybrid vehicles.
If realized, the policy will expand the tariff war that previously only focused on pure electric vehicles and close the gap that has been used by a number of Chinese automotive manufacturers. An industry executive interviewed by Handelsblatt said Chinese manufacturers moved quickly after the electric vehicle tariffs were imposed.
According to him, this condition is an open gap that must be closed by the European Union. This concern is inseparable from the increasing penetration of Chinese brands in the European market.
Reported by Carscoops, Monday, June 22, registrations of BYD plug-in hybrid vehicles are reported to have grown much faster than its pure electric models throughout the year. Meanwhile, Chery is said to have sent tens of thousands of plug-in hybrid units to Europe, while the volume of pure electric vehicles shipped is much less, according to a Handelsblatt report.
For European manufacturers who are trying to maintain market share from the onslaught of Chinese manufacturers, this trend is a challenge in itself. Currently, the Chinese automotive industry is said to account for about one in every 10 new cars sold in Europe.
However, the plan to implement the new tariff is still in the discussion stage. The report states that an official investigation is being prepared, and if it receives approval from EU member states, the policy could be implemented in the coming months.
On the other hand, not all parties believe that additional tariffs will be able to significantly hinder the expansion of Chinese manufacturers. UBS analyst Patrick Hummel assessed that the profits that can be obtained in the European market are still quite large so that additional import duties are likely not to thwart the long-term strategies of these manufacturers.
In addition, a number of Chinese automotive companies have also begun to bring their production closer to the European market. Some of them use less optimal manufacturing facilities owned by established manufacturers such as Nissan, while others are preparing to build new factories in the region to avoid the impact of tariffs in the long term.
Political attitudes in Europe are also beginning to be seen. Governments that previously tended to be cautious in taking steps that could potentially trigger tensions with Beijing are now considered more open to a more assertive trade policy to maintain the competitiveness of domestic industries.
Even so, European consumer interest in Chinese automotive brands continues to show a positive trend. Regulations and tariffs may slow down their expansion rate, but it is difficult to stop the ambitions of Chinese manufacturers who are currently still aggressively expanding their business footprint in the European market.
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