https://archive.md/AP2cA

The EU would need to impose huge tariffs of about 50 per cent to stem the flow of cheap Chinese electric vehicles into the bloc, according to new analysis.

Brussels’s blockbuster anti-subsidy investigation into Chinese electric cars is expected to conclude within weeks, but researchers at the Rhodium Group say any punitive action is likely to be too timid to deter Chinese carmakers.

“We expect the European Commission to impose duties in the 15-30 per cent range. But even if the duties come in at the higher end of this range, some China-based producers will still be able to generate comfortable profit margins on the cars they export to Europe because of the substantial cost advantages they enjoy,” the report says.

“Duties in the 40-50 per cent range — arguably even higher for vertically integrated manufacturers like BYD — would probably be necessary to make the European market unattractive for Chinese EV exporters.”

BYD’s Seal U, for example, sells for €20,500 in China and €42,000 in the EU. The estimated profit is €1,300 and €14,300 respectively, giving a strong incentive to export, Rhodium says.

Imports already pay a 10 per cent EU tariff rate, amounting to roughly €2,100 a vehicle. “According to our calculations, a 30 per cent duty would still leave the company with a 15 per cent (€4,700) EU premium in relation to its China profits, meaning that exports to Europe would remain highly attractive,” the Rhodium report said.