Europe will have to impose duties to limit the influx of Chinese electric cars

According to Rhodium Group's analysis, the European Union will have to impose higher duties to limit the influx of Chinese electric cars.

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The material was published against the backdrop of the EU's anti-subsidy investigation into imports of electric vehicles from China. The EU plans to impose duties in the range of 15% to 30% on Chinese electric vehicles, but the publication says that these duties are unlikely to be enough to curb competition from China.

Chinese companies such as BYD became the world's largest electric vehicle manufacturers last year. They can sell cars at much higher margins in regions like the EU. In addition, Chinese electric vehicle manufacturers are engaged in an intense price war in the domestic market.

The BYD Seal U model is sold in China for $20,000, while in the EU the price is €42,000, so the manufacturer generates an estimated profit of €1,300 in the domestic market versus €14,300 per car in Europe. Even after a 30% increase in tariffs, a company like BYD will make more profit in the EU.

BYD will likely have to lower its prices to achieve its goal of gaining a larger market share in the EU. A 30% tariff rate would leave plenty of room for this.

Source: Rhodium Group