EU Tariffs on Chinese EVs Spark Concerns in UK Market
- Chinese EV makers may prioritize the UK market over the EU due to tariff concerns.
- Analyst predicts a potential flood of Chinese electric vehicles in the UK.
- This shift aims to avoid punitive import tariffs imposed by the EU.
On July 5, the European Union announced provisional tariffs on Chinese-made electric vehicles (EVs), which are set to be backdated pending a vote by EU governments in November. The EU will only enforce these duties if it can demonstrate that the European auto industry is materially harmed without them. Discussions have occurred between EU Commissioner Valdis Dombrovskis and Chinese Trade Minister Wang Wentao, but no resolution has been reached. Dombrovskis expressed hope for a solution to avoid further escalation. The UK, however, appears unlikely to follow the EU's lead in imposing similar tariffs, as it has a strict Zero Emission Vehicle (ZEV) Mandate aimed at increasing electric car sales. As the second-largest market for EVs in Europe, trailing only Germany, the UK is seen as a potential safe haven for Chinese manufacturers looking to circumvent EU tariffs. Industry expert Matthias Schmidt predicts that Chinese EV sales will rise in the UK and Norway throughout 2024, as these markets account for a significant portion of new EV sales in the region. UK Trade Secretary Jonathan Reynolds has indicated that while no options are off the table, any decision regarding tariffs must consider the needs of the export-oriented automotive sector. With affordable electric cars already in short supply, limiting options further could negatively impact UK consumers. Notably, several of the least expensive electric vehicles available in the UK are manufactured in China, highlighting the potential implications of the EU's tariff strategy.