EU Non-binding Vote on Chinese EV Tariffs Shows Members Are Divided

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New cars lined up for exports in Suzhou, Jiangsu province, on July 16, 2024

Only 10 of the 27 members of the European Union voted to support provisional tariffs on electric vehicles (EVs) shipped from China in a non-binding vote, the China Chamber of Commerce to the EU confirmed from several sources Wednesday.

In the advisory vote, France, Italy, Spain, Belgium and Poland supported the tariffs, while Germany, Sweden and Austria abstained, and Hungary, Slovakia, Cyprus and Malta voted against, the chamber said, citing a number of European media reports.

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Only 10 out of 27 EU members supported provisional tariffs on Chinese EVs in a non-binding vote; the final decision requires a qualified majority.
Germany opposes tariffs due to its larger EV market in China; potential lower tariffs for German makers' China-made EVs may ease decisions.
China's pure EV exports to the EU dropped by 11.7% early in 2024; Chinese companies like BYD are exploring EU-based manufacturing to mitigate tariff impacts.

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Who’s Who

BYD Auto Co. Ltd.: BYD Auto Co. Ltd. is exploring building factories in Europe to mitigate tariff impacts. The company has signed a deal with Turkey to construct a $1 billion factory. Turkey, while not an EU member, has a customs deal with the bloc. Additionally, Spain has offered some old factories to Chinese companies like BYD for EV production.

Chery Automobile Co. Ltd: Chery Automobile Co. Ltd. is among the Chinese companies exploring the establishment of factories in Europe to mitigate the impact of potential EU tariffs on electric vehicles. This strategic move comes amid the provisional tariff measures proposed by the EU, which could significantly affect Chinese EV exports to the region. The company is considering options like building production facilities to navigate the imposed tariffs more effectively.

BMW: The article mentions that the European Commission has signaled lower tariffs for BMW's electric vehicles (EVs) manufactured in China. This move could potentially ease the path to increased tariffs on Chinese-made EVs, benefiting German automakers like BMW.

Volkswagen: Volkswagen's electric vehicles (EVs) manufactured in China may face lower tariffs, potentially facilitating approval for increased tariffs on other Chinese EVs. Germany, which opposes the tariffs due to its carmakers' significant EV sales in China, could benefit from this nuanced approach. The European Commission's move aims to balance interests while navigating trade negotiations with China.

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What Happened When

June 22, 2024：: Negotiations between China and the European Commission over the EV tariffs began.

Earlier this month (July 2024)：: The EU moved to impose provisional tariffs on EVs made in China, raising rates to as high as 48%.

2024-07-17：: China Chamber of Commerce to the EU confirmed that only 10 of the 27 EU members voted to support provisional tariffs on EVs shipped from China in a non-binding vote.

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