Europe wants to stop the invasion of Chinese electric vehicles. He’s already tried this with solar panels and failed.

  • In the case of the Chinese electric car, Europe may stumble over the same rock as a few years ago with photovoltaic panels.

  • China is becoming stronger in the European electric vehicle market, and the same is happening with European companies in the Asian market.

Electric cars and solar panels are not technologies of the future, but of the present. Both are gradually becoming more affordable, allowing more citizens to choose them, and governments like this because they are two keys to decarbonization. What they have in common is that China is a huge power that is forcefully penetrating Western markets and that at times they are trying to stop.

Currently, we see that there are countries trying to stop Chinese EVs through tariffs. As they say, history is doomed to repeat itself, and in Europe they have already tried to do this with electrical panels. Eventually the flag of surrender was raised.

Dumping. At the beginning of the century, many countries began to turn to renewable energy sources. Seeing rising CO2 emissions into the atmosphere, green energy was seen as a great hope, and wind and photovoltaic fields began to be commissioned. At the user level, this wasn’t too big of a deal, since the prices of solar panels for self-consumption were prohibitive, but in the business community, an enemy began to emerge: China.

The Asian giant began producing solar panels in industrial quantities, flooding foreign markets with panels at a lower price than local ones and gaining acceptance among buyers. Panel companies are putting pressure on the European Commission, which in 2013 decided to introduce a protectionist measure against Chinese panels to avoid dumping (selling products below cost). They came up with an 11.8% tariff on Chinese panels. And, if the Chinese government had not taken action, the premium would have increased to 47.6%.

The end of protectionism. The Commission announced that the measures, introduced in June of that year, would last for six months and, after this period, each member state would decide whether to make them permanent for a period of five years. It is curious that some countries did not agree with this measure of the Commission.

This measure turned out to be a failure. China continued with its Made in China 2025 plans to stop being just another country’s factory and become a power, and in 2018 Europe opened its doors wide to panels from China again. At first, the Chinese commissions were not very efficient, which gave them a bad reputation, but over the years they have greatly improved their processes and, taking this and the economic problems into account, the Commission decided that it did not make sense to maintain this measure. . anti-dumping.

2024. Currently, China has not only gained a foothold in the electrical panel market, but has also made the world dependent on its technology. A panel made in China is 50% cheaper than a panel made in Europe, and what was only a concern for companies in the first decade of the 2000s is now having an impact on consumers. Reduced panel prices make it possible to purchase panels for your own consumption, and they are even cheaper than garden fences.

Business interests. This flood of Chinese solar panels leaves Europe and the United States with only one choice: specialize or give up. And given what’s happening with panels, let’s move on to electric vehicles. The current situation is similar to what we saw 10 years ago with photovoltaic panels, and we are seeing countries like the US imposing high tariffs on electric vehicles from China. From 25% they grew to 100% overnight.

It doesn’t look like things will slow down as the Biden government’s measure will be repeated if Trump wins the election. In Europe, we cannot afford a 100% tariff on Chinese electric cars for a very simple reason: there are powerful commercial interests. Firstly, Europe is the Western market that is putting the most pressure on the transition to electric vehicles. Secondly, Germany is one of the most important markets and not only do many of its cars come with Chinese parts, but companies like Volkswagen are interested in the continued growth of the Chinese market.

everything is clear with China. For its part, China continues to flood Europe with electric vehicles. One of the best-selling cars in Spain last year was the MG ZS, a car from SAIC, which has just acquired another huge Ro-Ro ship to continue sending electric vehicles to the West.

It looks like the story of solar panels, at least in Europe, is destined to repeat itself with electric cars. We’ll see what happens in the future, but at the moment various companies have a strong dependence on China and something like the tariffs that the North American market has applied seems impossible.

Images | Ricardo Aguilar, AleSpa

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