EU Tariffs Stifle Growth in China's Electric Car Exports, Says Official

An industry official states that EU tariffs are stifling the growth of China's electric car exports. The tariffs are creating significant challenges for Chinese manufacturers, impacting their ability to compete in the European market. This development underscores the broader tensions in international trade relations and highlights the hurdles faced by China's burgeoning electric vehicle industry as it seeks to expand its global footprint.

Boston Brand Media brings you the latest news - The prospect of European tariffs reduced China's growth in exports of electric and plug-in hybrid cars by 20-30 percentage points in recent months, an official at a leading Chinese auto industry body stated on Monday.

Last week, the European Union introduced provisional tariffs of up to 37.6% on China-made electric vehicles (EVs) to prevent what it described as a potential flood of unfairly subsidized EVs, a move strongly opposed by China.

The EU also implemented measures in March allowing tariffs to be imposed retroactively.

"New energy vehicle exports currently face temporary pressure," said Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), on Monday. New energy vehicles (NEVs) include electric cars and plug-in hybrids.

"Our (NEV export) growth used to be at least 30-40%, and it has slowed to only more than 10%, meaning (the tariffs) had a 20-30 percentage point impact on (NEV export growth), a conspicuous short-term impact," Cui added.

He spoke after the CPCA reported that China's domestic car sales fell for the third consecutive month in June.

NEV exports increased 12.3% year-on-year in June but dropped 15.2% from May, with NEV exports accounting for 21% of total car exports, down 3 percentage points from June 2023.

Amid the EU's crackdown, U.S. electric carmaker Tesla's (TSLA.O) exports of China-made EVs in April-June fell to the lowest level since the third quarter of 2022 when its Shanghai factory operations were largely suspended during a COVID lockdown. Europe is the largest export market for Tesla EVs made at the Shanghai plant.

Boston Brand Media also found that, China's total car exports for June rose 28% year-on-year following a 23% gain in May, supported by strong gasoline car exports, according to the CPCA.

Domestically, China's car sales fell 6.9% in June from a year earlier, marking the third straight month of decline as government incentives failed to boost consumer demand amid a slow economic recovery.

Passenger vehicle sales totaled 1.78 million, with the pace of decline increasing from a 2.2% drop in May and a 5.8% fall in April.

A price war since 2023 helped to lift Chinese vehicle sales earlier in the year but has had less effect in recent months despite new government subsidies for trading in cars, announced in April.

For the first half of the year, China's domestic car sales were up 2.9% at 9.93 million vehicles.

June sales of NEVs accounted for a record 48.1% of domestic car sales.

Chinese EV giant BYD (002594.SZ), along with relative newcomers such as Nio (9866.HK), Zeekr (ZK.N), and Leapmotor (9863.HK), all reported record monthly sales.

Overall growth in EV sales slowed to 9.9% from 27.4% in May, while sales of plug-in hybrids surged 67.2%, up from a 61.1% increase the previous month.

Highlighting the weakness in consumer demand, a vehicle inventory alert index compiled by the China Automobile Dealers Association rose by 8.3 percentage points year-on-year to 62.3% in June.

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Source: Reuters‍