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EU Customs Registration of Imports of Electric Vehicles from China

iconMar 7, 2024 00:13
On Tuesday, the European Commission announced a customs registration of electric vehicles (excluding hybrids) imported from China at the time of import. This is in line with countervailing investigations into electric vehicles from China since last year and pre-registration for possible future tariff backdating. The EU said that in recent years...

On Tuesday 5 March, the European Commission issued EU Communiqué 2024/785. Customs registration measures for imports of electric vehicles from China will be introduced from Thursday 7 March CET. This is in preparation for possible retroactive tariffs to be imposed in the future. The EU's countervailing investigation into Chinese cars is expected to be officially closed in November this year. If the result of the investigation is that OEMs in China have received subsidies that undermine trade fairness, tariffs on imported vehicles could be imposed retroactively to the date the records began. In addition, the EU may also implement provisional tariffs as early as July.

The EU says the number of EV imports from China has continued to grow sharply in recent years. According to EU survey data, 177,839 EVs (under CN code 87038010) were imported from China between October 2023 and January 2024, an increase of 14 per cent year-on-year. The EU believes this trend, if it continues, will cause irreversible damage to European car manufacturers. According to Reuters, the share of these EVs in the EU market will reach 8 per cent by 2023 and could rise to 15 per cent by 2025, while the cost of these vehicles is typically 20 per cent lower than European-made models. The EC emphasised that at this stage, based on the information gathered during the investigation, it proves that the damage to the EU automotive industry is already starting to be felt and will be difficult to be undone until the investigation is completed. According to the Commission, "the evidence at this stage frequently points to the fact that electric vehicles exported from China are being unfairly subsidised."

In October 2023, the EU launched a countervailing subsidy investigation. They visited Chinese car manufacturers such as BYD, Geely and SAIC. This was to verify information they had previously submitted in questionnaires and to find out whether the Chinese EV value chain was benefiting from irregular subsidies. At the same time, the EU is trying to find out whether these subsidies are causing direct or indirect damage to EU EV manufacturers. Last September, European Commission President Von der Leyen argued in the European Parliament that the global market is flooded with lower-priced Chinese EVs due to huge state subsidies. This behaviour is distorting the European EV market.

If the results of the EU's investigation finally make a positive assertion, the EU will open the formal imposition of additional tariffs in the 13th month after the investigation launched, i.e. in November this year.

SMM believes that as China's EVs continue to increase their market share in Europe, the question of whether there are unfair subsidies has moved away from simple factual disputes and has become a key part of the game of industrial competition and trade friction between Europe and China. Since the United States opened the Inflation Reduction Act (IRA) huge subsidies, the EU has also accelerated the pace of support for local electric vehicle production and industrial chain construction. This contradiction is difficult to reconcile. Regardless of the results of this survey, the European EV market will gradually raise the entry threshold for Chinese EVs. For Top OEMs in China, accelerating the layout of production capacity in Europe is an sensible choice to maintain and improve market share in Europe.

New Energy

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