On July 1st, GAC Aion announced the dynamics of its Thailand factory and revealed plans to establish a factory in Europe. On the same day, Chongqing Changan Automobile's subsidiary, Deep Blue Auto, released announcements related to the European market. Chen Qing, from BOCOM Intl, stated that most Chinese car companies have expectations for tariffs on battery-electric vehicles. Arrow Electronics Inc predicts that by 2030, sales of Chinese brand cars in areas outside of China will increase from 3 million vehicles this year to 9 million vehicles.
In response to the trend of globalization, Chinese autos are entering the deep water zone of going global. On July 1, GAC Aion announced that the intelligent ecological factory in Thailand will be completed in mid-July, and the second generation AION V will also be synchronized globally.
"GAC Aion will land in Europe at the end of this year, and the relevant inspection work for factory construction is also in progress," revealed Gu Huinan, the general manager of GAC Aion.
On the same day that GAC Aion announced the dynamic of Thailand factory and revealed information about the establishment of a factory in Europe, Changan Auto's Blue Car under Changan Auto also released relevant information about the European market. According to the plan, Blue S07 will accelerate its pace of going global and enter markets such as Europe, the Commonwealth of Independent States, the Middle East and Africa, Central and South America, and is expected to cover more than 70 countries.
In the context of some markets, including the EU and North America, holding up the 'big stick of tariffs' against globalization, the information released by GAC Aion and Blue Car has become a microcosm of Chinese brands accelerating their "going out".
On June 12, close to mid-year, after more than eight months of anti-subsidy investigation into Chinese electric cars, the European Commission decided to impose provisional anti-subsidy tariffs on imported electric vehicles from China. Among them, the three companies surveyed by random sampling, BYD, Geely, and SAIC, will be subject to tariffs of 17.4%, 20%, and 38.1% respectively. Other 13 companies including FAW, Changan, Brilliance BMW, Tesla, Nio, and Xiaopeng will be subject to a weighted average tariff of 21%. The EU's tax action will begin on July 4.
Non-EU member Turkey also announced on June 8 that it will impose an additional 40% tariff on imported autos from China starting on July 7, with a minimum additional tariff of $7,000 per vehicle. In March 2023, Turkey will also impose an additional 40% tariff on imported electric vehicles from China, and the tariff will increase to 50%. Additionally, on May 14, more than a month ago, the United States announced a series of tariffs on Chinese solar cells, electric cars, computer chips, medical products, and other commodities. Among them, the tariff on electric cars has increased from 25% to 100%, the tariff on power batteries has increased from 7.5% to 25%, and the tariff on battery components has increased from 7.5% to 25%.
In response to the abuse of trade protectionism by relevant parties, the Chinese government, industry associations and relevant automakers have expressed strong dissatisfaction while actively taking action. On June 27, a spokesperson for the Ministry of Commerce stated that the working teams of both sides are maintaining close communication and actively advancing consultations. They hope that both sides will work towards each other and push forward the consultation as soon as possible to achieve a solution acceptable to both sides, in order to avoid adverse impacts of trade friction escalation on China-EU economic and trade relations.
According to the relevant procedures, before July 18, the Chinese government and Chinese companies can provide broader opinions and request hearings within 10 days. Finally, the European Commission will come to a final conclusion and measures within four months before November 2, and the validity of the final measures will be five years.
"Most Chinese automakers expected tariffs on electric cars," according to Chen Qing, an analyst at Bocom International. From the perspective of export layout, basically all automakers' first factories built for export are in ASEAN countries, fully considering geopolitical and tariff risks. After the EU tariff is imposed, automakers will consider their own development strategies and decide whether to build local factories in Europe.
Faced with an uncertain market environment, Chinese automakers have begun exploring overseas markets such as Southeast Asia, the Middle East, Russia, Africa, Europe, North America, and Central and South America. Taking Europe as an example, Stellantis China announced that the first batch of trial-produced vehicles of the Zero Run T03 model has been successfully assembled at the Stellantis Group's factory in Tychy, Poland. "If it is feasible in terms of economic benefits, Zero Run vehicles can be produced at any factory under the Stellantis Group globally, and some models will be produced in Europe, but which factories will produce Zero Run cars remains to be disclosed," said Stellantis China.
"The company plans to begin producing electric vehicles at the recently acquired Barcelona factory before the end of this year, which is its first production base in Europe," said Zhang Jian, vice president of Chery Automobile and general manager of European operations. Although the temporary anti-subsidy tariff imposed by Europe will have some impact on the company's export business, Chery vehicles produced locally in Europe will help alleviate the pressure of the additional tariff. "The production capacity of the Barcelona production base cannot fully support Chery's medium and long-term plans in Europe, and we are considering the location of the second factory in Europe to further expand production capacity and market share."
SAIC and BYD, which are on the EU's tariff list, have also taken action. According to insiders, SAIC plans to establish two factories in Europe, one in France and one in Turkey. Earlier, BYD officially signed a land pre-purchase agreement with the municipal government of Székesfehérvár, Hungary, becoming the first Chinese auto manufacturer to build a passenger vehicle factory in the EU region.
"Establishing production bases for auto companies in regional centers can help balance international resources and interests, particularly in regions such as Europe, Southeast Asia, and some South American regions that have a demand for maximizing local interests. Therefore, localized overseas production is an inevitable trend," said Cui Dongshu, secretary general of the China Passenger Car Association.
Behind the "blockade" of Chinese brands, especially new energy brands, in regional markets including the EU, lies the all-round comparative advantage of Chinese auto companies in R&D, production, manufacturing, and industry chains under the global transformation of intelligent electrification of the auto industry.
"Export-driven auto sales achieved steady growth in the first half of this year." China Galaxy Securities released a research report stating that independent brands are seeking diversified overseas models, including production capacity export and the "new joint venture" model. Regarding production capacity export, the peak of overseas production capacity is expected to be achieved in 2024-2025, while the "new joint venture" model is accelerating the output of intelligent technology. "The shift from product export to production capacity export is expected to achieve overseas sales of 10 million units by 2030."
On June 28th, global consultancy firm Arrow Electronics Inc. released a new report predicting that Chinese brand auto manufacturers will continue to expand rapidly overseas, with sales outside China expected to rise from 3 million this year to 9 million in 2030, with market share outside China rising from 3% to 13%.