The UK “will have to follow” the EU by imposing additional tariffs on Chinese EV makers, industry executives and watchers have said. However, the UK could also exploit the split by encouraging more inward Chinese investment.
On Wednesday, the European Commission announced that Chinese-built EVs exported to the EU are to be hit with additional duty rates as high as 38.1% in reaction to investigations concluding that EVs in China benefit from “unfair subsidisation”.
“The UK is going to have to follow,” one senior automotive executive told Autocar. “They can’t not, otherwise all the ships will be diverted to the UK.”
The extra pressure will be delayed, however, due to Chinese EV makers needing to build right-hand-drive models for the UK instead.
“It’s important that the UK doesn’t become disconnected from Europe [on tariffs],” Toyota Motor Europe chief corporate officer Matt Harrison told Autocar on the sidelines of the Automotive News Europe Congress on Wednesday.
“Our expectation is that the UK will at some point refer Chinese-made EVs to the Trade Remedies Authority,” said Richard Hebditch, UK director of Belgium-based green pressure group Transport & Environment.
“The EU decision means that it's more likely to do soon, as Chinese [firms] would look to make up for fewer sales in the EU by targeting the UK.”
MG parent firm SAIC is worst hit by the EU’s provisional tariff rates, at the maximum 38.1%, on top the 10% that it already pays, bringing the total to almost half the cost of a car.
That means MG will either have to increase prices of its EVs or soak up the additional cost itself. The brand's combustion-engined and hybrid cars won't be affected by the tariffs.
MG has yet to comment officially on the EU tariffs, and a spokesperson said: “There has been no indication to date that the UK will follow."
Also hit is Volvo parent firm Geely, with an additional 20%, and BYD, with 17.4%.
Other EV makers will either be hit with a the additional 38.1% if they didn’t engage with the EU’s investigation or 21% if they did.
Those in the latter camp include Dongfeng’s eGT New Energy Automotive company, which builds the Dacia Spring.
An investigation into whether Chinese EV makers benefit from unfair subsidies can be raised by the Trade Remedies Authority only if they receive an application from UK car manufacturers or, in exceptional circumstances, the Secretary of State.
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