New EU tariffs on Chinese electric cars leave a loophole for hybrids
Kyiv • UNN
The new EU tariffs on Chinese electric vehicles do not apply to hybrid cars, allowing Chinese automakers to continue selling partially electric hybrids in Europe at lower tariffs, although they face competition from European manufacturers in this segment.
Chinese automakers can continue to sell hybrids to Europe at lower tariffs, although they face competition from European rivals there. UNN writes about this with reference to Politico.
Details
According to the publication, the new EU duties on Chinese-made electric vehicles do not apply to hybrid cars. This exemption allows Chinese automakers to continue selling partially electric cars in the EU at no additional cost - paying only the current 10% tariff on car imports.
Hybrid-electric models continue to be in demand among European buyers amid a decline in car sales in May. At the same time, the market share of hybrid cars increased from 25% in May 2023 to 30% over the same period this year, according to the latest data from the European Automobile Manufacturers Association.
Chinese automakers are already present in this segment.
The new plant of the Chinese electric vehicle conglomerate BYD in Hungary, which is scheduled to open by 2026, will produce both electric vehicles and hybrids. This summer, BYD is launching its first hybrid for the European market; the SEAL U DM-i is already available in the UK for around 39 thousand euros.
Importantly, such a hybrid will not be subject to the 17.4% additional duty levied on BYD as part of the European Commission's anti-subsidy investigation. Of the three automakers included in the investigation, BYD faces the lowest additional costs due to its cooperation with the investigation.
As sales of electric vehicles continue to fall - new registrations are down 12% this year - hybrids offer an attractive route for Chinese automakers to gain market share and circumvent the new duties.
But they will have to compete with existing automakers who are better positioned than they are in the EV market. Because hybrids retain the internal combustion engine, European original equipment manufacturers still have an advantage over many of their Chinese counterparts.
Recall
The European Commission has introduced temporary countervailing duties on imports of battery electric vehicles from China in the amount of 17.4% for BYD, 19.9% for Geely and 37.6% for SAIC.
