Source: Securities Times Author: Wu Shun.

On June 12, the European Commission issued a statement stating that it intends to impose a temporary anti-subsidy tax on imported electric vehicles from China from July 4, with BYD, Geely Automobile and SAIC Motor Group respectively. Additional tariffs of 17.4%, 20% and 38.1% will be imposed. Chinese producers who are cooperative but not sampled will be subject to a weighted average tariff of 20.8%, and companies that are not cooperative will be taxed at a rate of 37.6%. This temporary tariff will take effect on July 5, 2024, and will last for up to four months.

On July 5th, this tax increase may take effect. The implementation of this policy will have a significant impact on many Chinese automakers' global strategy, especially as there have been rumors that Chinese automakers may adjust the prices of models sold in the European Union.

In response to this, some car companies have issued their latest response. According to media reports, regarding the rumor that "Nio's sales in Europe may adjust due to additional EU tariffs", Nio said: "Nio is closely following and responding to the related progress and measures of the EU's anti-subsidy investigation. At present, Nio will maintain the pricing of its products in the European market, and will evaluate the market strategy according to the progress of tariff policies. In Europe, we will continue to serve Nio users. We believe that appropriate market competition is beneficial to users and hope to reach a solution with the EU before the final measures are implemented in November 2024."

On July 4th, the spokesperson of the Ministry of Commerce, Mr. He Yadong, stated at the regular press conference of the Ministry of Commerce that there are still four months before the final ruling. We hope that the European side and the Chinese side can move towards each other, show sincerity, and accelerate the negotiation process. Based on facts and rules, a solution acceptable to both sides can be reached as soon as possible.

The industry has actively responded.

At present, the global automobile market is undergoing tremendous changes, and Chinese new energy vehicles are rising rapidly, especially China will replace Japan as the world's largest automobile exporter for the first time in 2023, breaking Japan's seven consecutive years of being the top automobile exporter. Data from China Automobile Association and Japan Automobile Association show that Japan's car exports in 2023 will be 4.42 million vehicles, up 16% year-on-year, while China's car exports during the same period will soar by 58% to 4.91 million vehicles.

China Automobile Association predicts that China's total car sales will exceed 31 million vehicles in 2024, an increase of more than 3% year-on-year. Among them, passenger car sales will be 26.8 million vehicles, an increase of 3% year-on-year, while commercial vehicle sales will be 4.2 million vehicles, an increase of 4% year-on-year. Among them, exports will continue to grow, reaching a scale of 5.5 million vehicles.

As a crucial player in the global automobile market, the EU is even more important for Chinese automobile companies to lay out overseas. Taking Nio's latest response as an example, on June 28, Nio announced that its experience center in Cologne, Germany has been officially put into use; on July 1, Nio's battery exchange station in Berlin was officially unveiled and put into operation. This is Nio's 44th battery swap station in Europe, and the 16th in Germany. With the launch of this station, Nio will provide convenient charging experience for the eastern region of Germany.

Previously, SAIC Motor Group and Geely Holding Group also issued statements regarding the EU's temporary anti-subsidy tax.

SAIC Motor Group believes that free trade and fair competition are the keys to promoting global economic prosperity and sustainable development. The decision of the European Commission is deeply disappointing. The relevant measures not only violate the principles of the market economy and international trade rules, but may also have a significant adverse effect on the stability of the global automobile industry chain and China-Europe economic and trade cooperation. SAIC Motor Group further stated that it hopes the EU can listen carefully to the voices of Chinese and German automobile companies, firmly avoid setting up new energy vehicle trade barriers, and effectively maintain a fair competitive market environment. Only through open dialogue and cooperation can challenges be overcome and win-win outcomes be achieved.

Geely Holding Group also stated that the European Commission's imposition of tariffs on imported electric vehicles from China is a wrong decision that will harm Europe's own interests and hinder China-Europe economic and trade development. Geely Holding has always supported free trade, advocated fair competition, strictly complied with relevant laws and regulations, and provided excellent products and services to global users. In the past nearly 20 years, Geely Holding has made a lot of investments in Europe, enhancing the innovation capability of the entire industry chain and creating tens of thousands of job opportunities.

Geely Holding Group calls on the European Commission to carefully consider its decisions and jointly find a solution to promote fair competition and a sound development environment.

In the A-share market, many automobile industry chain companies have also responded to the EU's imposition of tariffs.

Feilong Auto Components: The EU's imposition of additional tariffs on electric vehicles imported from China has not yet had an impact on the company's production and operation. The company will closely monitor the development of the situation, maintain close communication with customers, and actively respond to policy risks.

Chao Da Equipment: If the EU implements the plan to impose tariffs on Chinese electric vehicles, it may have a certain impact on China's electric vehicle exports. The company will closely monitor the development of the situation, maintain close communication with customers, and actively respond to policy change risks. Currently, the company's production and operation are normal.

Zhengqiang shares: The policy of the EU imposing tariffs on Chinese electric vehicles has not had a significant adverse effect on the company's production and operation. After more than 20 years of business accumulation, the company has specialized and scaled production advantages, strong R&D capabilities, and core competitiveness. The company will closely monitor the industry policy trends and continuously enhance its own risk resistance ability.

Fusai Technology: If the EU implements the plan to impose tariffs on Chinese electric vehicles, it may have a certain impact on China's electric vehicle exports, especially on electric vehicle manufacturers that focus on the European market. The company will closely monitor the development of the situation, maintain close communication with customers, and actively respond to policy change risks. Currently, the industry is in a period of rapid development, and the company's orders are growing, with normal production and delivery.

Ministry of Commerce: Multiple technical consultations have been held between China and Europe.

Regarding the issue of the EU imposing tariffs, relevant industrial chains in the EU have also voiced their opposition.

The German Automotive Industry Association issued a statement on July 3, opposing the EU's temporary anti-subsidy tariff on imported electric vehicles from China. The association believes that this approach is not in the interests of the EU, will not only have a negative impact on European consumers and businesses, but will also hinder the development of the EU's domestic electric vehicle market and is not conducive to achieving climate goals.

The statement pointed out that the temporary anti-subsidy tariff on imported electric vehicles from China will particularly affect European car companies and their joint ventures, as a considerable part of the electric vehicles imported from China by the EU comes from European and American manufacturers, and these companies' cooperation and production in China are important cornerstones of Europe's energy transformation and competitiveness improvement. On the other hand, China's advanced technologies such as raw materials and batteries provide a guarantee for the European electric vehicle industry, and additional tariffs will make electric vehicles more expensive in the European market, thus restricting consumer purchases.

According to Daily Telegraph, BMW Group Chairman Oliver Zipse said, "Additional import tariffs will lead to a dead end." This will not strengthen the competitiveness of European manufacturers but instead, "the opposite. This not only damages the business model of global active companies but also limits the supply of electric vehicles to European customers and even slows down the decarbonization process of the transportation industry."

Regarding the above news, on July 4th, Ministry of Commerce spokesperson Gao Feng said at a regular press conference held by the department that the Chinese side noted that some EU member governments and major automakers have repeatedly expressed their opposition to the EU's implementation of anti-subsidy measures against Chinese electric vehicles. China hopes that the EU will seriously listen to the call within the EU, conduct rational and pragmatic consultations with China, avoid anti-subsidy measures that will harm mutual beneficial cooperation and joint development of the EU and Chinese auto industries.

Gao Feng also said that regarding the EU's initiation of an anti-subsidy investigation against Chinese electric vehicles, China has repeatedly expressed strong opposition and advocated resolving economic and trade frictions through dialogue and consultation. On June 22, Minister Wang Wentao held a video conference with Valdis Dombrovskis, Executive Vice-President of the European Commission and EU Trade Commissioner, and the two sides agreed to immediately start consultations based on the two pillars of facts and rules to properly handle the case. So far, multiple technical consultations have been held between China and Europe. There is a four-month window period before final ruling. The Chinese side hopes that the EU will work with China in good faith, show sincerity, speed up the consultation process, and quickly reach a solution acceptable to both sides based on facts and rules.

Previously, the EU Chamber of Commerce in China stated in a statement on the pre-disclosure of the European Commission's imposition of temporary anti-subsidy tariffs on imported Chinese electric vehicles that the advantage of China's electric vehicle industry lies in technological innovation and cost management, and through continuous technological iteration and fierce market competition, relying on China's overall supply chain advantage, developed strong market competitiveness. This is helpful to develop electric vehicles as a green product and technology for global green transformation. The advantage of China's electric vehicle industry does not come from subsidies.

The EU Chamber of Commerce in China also pointed out that in the field of green transformation and response to global climate change, the greatest challenges faced by the world are not excess production capacity, but insufficient production capacity, high prices of green technologies and products. The automotive industry is the "crown jewel" in the European industry, and its global competitiveness is unmatched. Normal market competition will help stimulate industrial vitality during its electrification transformation. The combination of brand effects of European car companies and the innovative complete supply chain system of Chinese electric vehicles is not only conducive to European companies sharing the market opportunities and development opportunities of the world's largest electric vehicle market - the Chinese market, but it also helps to enhance the global competitiveness of local European car brands. At the same time, the localization strategy and talent cultivation of Chinese companies in Europe are beneficial to Europe's creation of its own electric vehicle supply chain ecosystem.

Editor/Lambor