The European Commission’s decision to increase taxes on Chinese-made electric vehicles has sparked strong reactions from automotive giants Stellantis (Alfa Romeo, Citroën, DS, Fiat, Jeep, Opel, Peugeot), Mercedes, BMW, and VW. This new tax, resulting from an anti-dumping investigation initiated last year, will rise to as much as 38.1%. Why has this decision caused such a backlash? Here are the details…
European car giants react to increased taxes on Chinese cars
BMW CEO Oliver Zipse stated that these taxes would harm European companies and the interests of Europe. Zipse warned that protectionism could lead to new tariffs and isolation, making it difficult to compete successfully in international markets.
Mercedes CEO Ola Kallenius emphasized that global trade should be free and fair. Kallenius highlighted the importance of reducing trade barriers rather than increasing them. VW argued that these new taxes would harm the European car industry’s competitiveness rather than boost it, particularly affecting the weak demand for electric vehicles in Germany and Europe. Volkswagen claimed that the negative impacts of this decision would outweigh the potential benefits.
After the additional tax on Chinese cars, MG said that it is interested in local production in Turkey.
Stellantis expressed its belief in free and fair competition and stated that such measures would do nothing but fragment global markets. Stellantis noted that the details of this decision by the European Commission would be published in the official gazette on July 4, 2024.
The German Association of the Automotive Industry (VDA) and Volvo also opposed these new taxes. The VDA warned that these measures could trigger trade wars and would not increase the competitiveness of the European car industry. Volvo’s Chief Commercial Officer and Deputy CEO Björn Annwall stated that these taxes would increase the prices of electric vehicles, forcing customers to pay more.
These new taxes will also affect Western manufacturers like Tesla, BMW, Volvo, and Dacia. Tesla imports the Model 3 to Europe from China, while BMW produces the electric SUV iX3 and the new electric MINI in China. These new taxes could bring billions of euros in additional costs to these manufacturers.
How will this new tax decision affect the future of the European automotive industry? Will it trigger a trade battle between China and Europe? Or will this decision force European car manufacturers to become more competitive? Time will tell. What do you think? Share your thoughts in the comments section below!
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