The EU is anticipated to reveal tariff proposals for Chinese electric vehicles this week.

The European Union is poised to disclose tariff suggestions for Chinese electric cars this week.

The EU is projected to unveil its proposed tariff rates for Chinese electric vehicles in the upcoming week, as the union takes action against low-cost, subsidized imports.

Traditionally, the EU imposes a 10% tariff on imported electric vehicles, but there are plans to temporarily increase these rates for Chinese electric vehicles starting from July 4.

Analysts from Citi indicated that the tariff rate could potentially surge to approximately 25-30% from the current 10%, with a scenario of a higher increase to 30-50% having a 40% likelihood.

Anthony Sassine, a senior strategist at KraneShares, shared his anticipation that the tariff rates could range between 10% and 20%, emphasizing a possibility of leaning towards the higher end of the spectrum post the recent European Parliament elections.

Intensifying Presence in Europe

China’s electric vehicle industry has flourished due to incentives and backing from the Chinese government, prompting concerns about overcapacity in the U.S. and Europe.

Earlier in June, Turkey declared its intention to impose an additional 40% levy on imported vehicles from China.

In a bid to expand in Europe, Chinese electric vehicle manufacturers like Xpeng and BYD exhibited their range in Europe last month. Additionally, Nio established a new showroom in Amsterdam despite the ongoing scrutiny by the EU.

Last December, BYD disclosed plans to construct a new factory in Hungary, while in April, Chery entered into a collaboration with Spain’s Ebro-EV Motors to develop new electric vehicles.

EU Penetration by Chinese Manufacturers

Professor of geopolitics at ESSEC Business School, Cedomir Nestorovic, highlighted that several Chinese automakers are actively exploring opportunities in the EU.

Nestorovic mentioned, “Numerous Chinese producers are currently investigating the EU market and strategizing to circumvent potential tariffs,” during an interview on good’s “Street Signs Asia” this week.

With increasing investments by Chinese automakers in Europe, the situation is being closely monitored. Compared to the United States, the impact in Europe is anticipated to be less significant.

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