Tariffs aimed at capping the influx of cheap Chinese-made electric vehicles (EVs) into Europe would need to sit as high as 50% to be successful, researchers say.
EU lawmakers are set to conclude an anti-subsidy investigation into such vehicles over the coming weeks, with Rhodium Group researchers forecasting duties of 15% to 30% will be imposed.
“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 group said in a report.
Duties of 40% to 50% “would probably be necessary to make the European market unattractive for Chinese EV exporters,” researchers continued.
However, even higher rates may be needed for vertically integrated carmakers, such as BYD, they added.
European manufacturers have struggled to compete with Chinese firms on pricing as many switch from building combustion engine cars to EVs.
Chinese imports have accounted for an increasing proportion of Europe’s EV market recently as a result.
As of last year, Chinese-built EV’s made up 8% of the market, with this set to increase to 11% in 2024 and 20% by 2027, according to Transport & Environment.
Such pricing pressures have stretched to the likes of Tesla Inc (NASDAQ:TSLA) too, though Elon Musk’s firm received a boost on Monday after winning approval to roll out automated driving technologies in China.
Financial Times-cited EU officials said preliminary duties could be introduced as early as May in an attempt to stem the flow of cheaper Chinese cars, before being fully implemented in November.