Chinese EV firms can absorb EU tariffs: expert

The European Union’s new tariffs imposed on Chinese electric vehicles (EVs) will not greatly impact imports from China, according to the view of a former general counsel of the Office of the United States Trade Representative (USTR).

Chinese automakers can easily absorb the EU’s lackluster tariffs and maintain profitable margins in Europe, Greta Peisch, a partner in the International Trade Practice at the American law firm Wiley, told Asia Times in an interview.

”Chinese companies are selling their EVs at a lower price point in China than in Europe. And when you compare the two kinds of sticker prices, it appears that there’s quite a lot of room for the Chinese companies to absorb that tariff,” she said.

“Even if the tariff is potentially set at 38%, they will still be able to sell their EVs in Europe with the similar profit margin that they would be making in China,” she said.

She said the depression of prices for EVs in the Chinese market occurs from the buildup of a capacity that China cannot absorb anymore. She said, for example, that BYD sold an EV model in China for about US$12,000.

In April 2023, BYD priced its Seagull subcompact EV, the brand’s cheapest model, at US$11,400 in China. The model, powered by a 55 kilowatt electric motor and a 30 kilowatt per hour battery pack, can run 305-405 kilometers per charge. The battery allows the EV to charge up to 80% in 30 minutes.

Last month, BYD offered its Seagull EV Honor Edition at US$9,700 in China. Media reports said the company planned to launch the model in Europe but would price it at about 20,000 euros (US$21,475). Similar European EV models are priced at around 25,000 to 30,000 euros.

In fact, the EU on Wednesday only imposed a 17.4% tariff on BYD’s EVs. The