Electric car: Chinese models soon to be more expensive in Europe?


– The giant BYD has acquired its own ship to increase its deliveries of electric cars outside China.

The European skies are becoming threatening for Chinese car manufacturers. This Thursday, March 7, European customs began to register electric cars made in China, on the orders of the European Commission. BYD, Geely and SAIC could face serious headwinds on the Old Continent, because this decision could only be a first step before the implementation of onerous customs duties. A scenario that would undermine the main advantage of Chinese products: their ultra-competitive price.

This decision is the result of an investigation opened in October 2023, to determine whether Chinese electric cars benefit from illegal subsidies. Obviously, the investigators did not leave their visits to China empty-handed. Without clearly speaking of illicit aid, the European Commission assures that it has “ of evidence tending to show » that electric cars from China are subsidized. And this, in various forms: “direct funds transfer”, “public revenue abandoned or not collected” And “provision by public authorities of goods or services for less than adequate remuneration”. In other words, certain manufacturers would have benefited from underinvoiced goods or services thanks to the Chinese state.

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Not really a scoop

We imagine that European manufacturers will hardly be surprised by these discoveries. Like the European Commission, Capital carried out his little investigation. “I have already seen a Chinese equipment manufacturer with an electric motor half the price in Europe. In fact, their teams had worked with Peking University. They had free access to a prototype worth 300,000 euros”, a connoisseur of the automotive sector told us. Another professional in the sector could not understand the unbeatable prices of Chinese electric models: “There’s a bit of magic in their prices. “.

On the Chinese side, we minimize the weight of state aid. For Michael Shu, president of BYD Europe, Chinese competitiveness comes more from a technological advance. “We invested in this technology much earlier and much more heavily than our competitors”declared the manager in February to the Financial Times.

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Another argument from Chinese players: China may be subsidizing its electric cars, but isn't France doing the same when it finances each social lease to the tune of 13,000 euros or when billions of euros rain down on the factories of batteries in Hauts-de-France? A sector specialist debunked this line of defense in our columns: “When Europe defends its industry, it does so on its own territory, while China supports its companies on the territory of others. » But there is no doubt that the Chinese government will again criticize the European Union for a “protectionist” maneuver.

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Electric car: the Chinese manufacturer MG thrives on low prices

Waiting for investigation results

The rest of the procedure will depend on the final results of the European investigation. “The collection of countervailing duties (…) could be considered appropriate” if the investigators believe that European manufacturers are suffering “significant harm”. The registration implemented on March 7 could also be used to retroactively implement customs duties on Chinese electric cars currently arriving on the Old Continent.

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Between 2022 and 2023, sales of Chinese manufacturers in Europe increased by 75%, at 353,276 units, according to data from the Inovev firm. This commercial success encourages Chinese manufacturers to accelerate their installation in Europe. Tesla's rival BYD is already planning to build a factory in Hungary. SAIC, parent company of the successful MG brand, is also studying the installation of a production site on the continent. It remains to be seen whether the implementation of possible restrictions will not discourage Chinese groups. We can also wonder whether such measures are in the interest of European manufacturers, as the electric vehicle sector depends on Chinese machines and batteries. And while the supply of accessible electric cars is not that vast, the taxation of Chinese models risks further restricting consumer choice.

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