European Decision on Chinese BEV Tariffs Expected This Week

The European Commission is set to reveal the outcome of its investigation into China’s unfair subsidies to its automakers this week, some five months ahead of schedule.

It is widely believed that the European Union’s trade body report will herald the early imposition of punitive tariffs against the importation of Chinese battery-electric vehicles, the BBC reports.

While some automakers are against imposing these tariffs, notably the German brands who are greatly dependent on sales in the Chinese market and fear reprisal tariffs, many will see the EU’s move as buying them time to launch their own affordable BEVs.

By coincidence, Hyundai publishes the first sneak-peek images of its new A-segment entry-level BEV, the Inster (pictured) which is essentially an all-electric version of its Korean-only Casper internal-combustion-engine model. With a micro-SUV profile, the Inster claims a 220-mile (354-km) maximum range on a single charge and likely to be priced below current western-market BEV prices.

It’s the small super-cheap models that the EU fear the most, such as BYD’s tiny urban runabout, the Seagull. Sold in China from just $9,600, even with the extra safety features demanded by European regulators, the car would still undercut anything from legacy automakers.

The EU’s expected tariffs would bring it in line with the U.S.’s 100% tariffs recently slapped on Chinese vehicles, albeit Europe is not likely to use a rate that radical being more dependent on trade relations with China than its American cousin.

The BBC reports the Commission will recommend provisionally raising duties on BEVs imported from China from the standard level of 10%, for third country imports, to between 20% and 25%. It quotes Matthias Schmidt of Schmidt Automotive Research, saying this would be a more proportionate response than the U.S. tariffs.

He says: “The 100% tariff is just pure protectionism, regressive and stifles innovation, and prevents a competitive landscape for the consumer. If the EU imposes tariffs of no more than 25%, it will be more about leveling the playing field and evening out the 30% cost advantage Chinese manufacturers have.”