On May 28th, multiple high-ranking executives from European car companies believe that imposing tariffs on Chinese electric vehicles will not effectively safeguard the European automotive industry.
This is because European automotive giants have limited time to restructure their businesses and product lines to counter the rise of Chinese car manufacturers.
Although the European trade regulatory body had suggested the possibility of imposing new tariffs on Chinese electric cars based on anti-subsidy investigations, Ursula von der Leyen, President of the European Commission, emphasized that Europe will conduct a "tailored approach" investigation to ensure that any tariffs match the level of harm, with plans to notify relevant manufacturers by June 5th.
However, executives point out that even with tariffs, it will not deter the impact of lower-cost Chinese electric vehicles on European manufacturers and their suppliers.
According to Rongding Consulting data, Chinese automakers hold a cost advantage of over 30%, and last year, Chinese electric cars captured a 19% share of the European electric car market, up from 16% in 2022.
Furthermore, the increase in Chinese car exports and actions to establish factories in Europe are compelling European car manufacturers to seek collaborations with long-time competitors and demand cost reductions from suppliers.
While tariffs may temporarily reduce the cost advantage of Chinese manufacturers, German carmakers caution that if China retaliates by imposing tariffs on cars produced in Europe, Europe will face significant consequences.
