EU's tariff dilemma: Navigating the tightrope with China's EVs
As never before, the automotive industry has become an element of world politics. The European Union wants to defend itself against the influx of inexpensive Chinese electric vehicles, but those managing German conglomerates fear retaliation from the Middle Kingdom.
Electric vehicles produced by Chinese brands are already in Europe and are very low-priced. For about £27,000, you can own a vehicle representing Chinese engineering thought. To protect the industry of the Old Continent, the European Union began to consider imposing tariffs on them.
“It’s very easy to shoot oneself in the foot,” said Olivier Zipse, BMW's managing director, during an investors' meeting. The reason is simple: the electric Mini and iX3 sold "here" are produced in China. Moreover, China can respond with similar measures, and it is the second-largest market for this conglomerate, just after Europe. “Our industry does not need protection,” stated Zipse.
The controversial opinion was shared by Ola Källenius, who stated that Chinese competition would help Europe create better cars. One in three sold Mercedes goes to China. “There is always some form of retaliation,” said Thomas Schaefer, managing director of the Volkswagen brand, during the “future of the car” summit of the Financial Times.
The head of BMW also mentioned another interesting aspect. Manufacturers rely not only on the final product—the car—but also on components and materials. In the case of electric vehicles, key resources for battery production are situated in the Middle Kingdom. “There wouldn’t be even one car in Europe without components from China,” said Zipse.
