Car companies fear tariffs on Chinese cars will cause electric vehicle sales to stagnate

The auto industry has raised the tone of its concerns about the future of the electric vehicle market after learning of the European Commission’s expected preliminary ruling on its “anti-subsidiary” investigation into Chinese car brands in Europe. The intention, announced last Wednesday by Brussels, tighten import duties on “made in China” electric vehicles from the current 10% to 48% for the benefit of unfair competition has caused a wave of reaction in the sector, which is beginning to assess its impact.

In the event that negotiations between Chinese authorities and community leaders do not lead to an effective solution, tariffs for groups such as MG owner Saic will rise to 48%, and for other giants such as Geely, Volvo’s parent company, Lynk&Co. or Polestar will increase to 30%. The world’s largest exporter of electric vehicles, ByD, will also potentially suffer, with the barrier rising to 27%. It was these brands that initiated an unprecedented entry into the European electricity market, where they doubled their share to 8% after exports 10,000 million euros in the last exercise.

The Asian giant’s car makers have shocked the European industry with a formula based on competitive prices and cutting-edge technology, making them the biggest driver of demand for a product that countries such as Spain have resisted taking off. In this scenario, Ganvam, the majority employers’ association representing the interests of vehicle distributors and sellers, fears that Brussels’ protectionist policies “will lead to even greater market stagnation”. Sources in the association convey to La Información Económica their concerns about the impact on sales that higher prices for cars “that have opened up a niche that did not exist before their introduction” could have on sales.

Fears of retaliation in Asia

The Association not only does not interpret this measure as “help” to European producers, but also believes that the industry of the Old Continent will not stop the offensive to reduce prices of these cars in order to increase their sales at the level of investments that the sector is making to adapt its production to climate requirements. Moreover, employers warn that China’s response could harm European brands They are placing a significant portion of their global production in the Asian giant because they believe it is “highly likely that China will respond with strong measures that will have a greater impact.” However, they are defenders of a fair market in which “everyone should play by the same rules.”

A similar discourse is supported by the association representing car manufacturers, Anfac, which defends free competition in the market, “regardless of where the goods come from, provided that all transactions are carried out in compliance with applicable laws in international trade and occur on conditions of equality”, and emphasizes that “if there is anyone who does not comply with the requirements, he should be punished for this.” Its CEO, José López-Tafall, believes free trade is compatible with Europe developing “a strong industrial policy that encourages the production of electric vehicles in our country and attracts new investment.”

Both retailers and manufacturers also agree that measures must be taken to unlock sales of electric vehicles in Spain. Well, at the end of May, registrations of electrified passenger cars – pure electric and hybrid – accounted for just 9% of the market, representing a decline of 1.7 percentage points compared to the same month the previous year. These data place Spain in the galley of the European continentin contrast to other countries such as Portugal, where these passenger cars already capture almost a third of the market.

The car is impatient with the government

For this reason, the sector unanimously demands that the government implement effective tax incentives to stimulate demand. The industry sees the imminent completion of the Moves III plan to help purchase electrified vehicles as an ideal opportunity to develop a new program. provide subsidies to the consumer at the time of purchasing a carto avoid delays and waiting lists that the industry says are dampening demand.

Manufacturers began working with the relevant ministries – Industry, Green Transition and Finance – last month to find an alternative to the current aid program, which expires at the end of July, Anfac told this publication. However lack of government response to their complaints The goal of boosting market electrification led this Thursday to the resignation of association president Wayne Griffiths. In his farewell letter, the Seat and Cupra president also supported his departure by the government’s “inaction” to “quickly implement specific and effective measures.”

According to sources in the association, its cooperation with the government to resume aid is “still ongoing”, and they hope Griffiths’ farewell will serve as a warning to the executive to provide greater support for electrification. The head of the industry portfolio, Jordi Hereu, was quick to accept the challenge on Friday, acknowledging in statements to the press the relevance of the resignation, which he interpreted as “a wake-up call that we must bear in mind.” before participating in the 35th Business Trobad al Pirineu, held in Lleida.

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