Görg: Tariffs on electric vehicles from China will have significant negative impacts on the electrification transition of the European automotive industry

In October 2023, the European Commission initiated an anti-subsidy investigation on imports of battery electric vehicles from China. On June 12, 2024 the Commission provisionally concludes the “electric vehicle value chains in China benefit from unfair subsidies”. As a result, provisional countervailing duties up to 38.1% are expected to be applied to imported battery electric vehicles from China in early July, if no effective solution can be found in discussions with the corresponding Chinese authorities.

Prof. Holger Görg, Ph.D. (KCG Managing Director) warned in his recent interview to Xinhua Net that imposing additional tariffs on electric vehicles from China will lead to continued price increases of electric vehicles and further dampen demand, with significant negative impacts on the electrification transition of the European automotive industry. Since the countervailing duties would apply to all battery electric vehicles exported from China to the EU, German car producers with their electric vehicles produced in China would be affected as well.

Görg emphasized that having more in-depth communications and negotiations between the EU and China would help reach compromises and help avoid potential trade wars.

The abovementioned interview (in Chinese) can be found here.

Further background studies:

Bickenbach, F., Dohse, D., Langhammer, R.J., and Liu, W.-H. (2024), Foul Play? On the Scale and Scope of Industrial Subsidies in China, Kiel Policy Brief 173.

Kiel Institute for the World Economy (2024), News: EU tariffs against China redirect trade of EVs worth almost USD 4 billion, May 31, 2024.

Contact:

Prof. Holger Görg, Ph.D. (holger.goerg@ifw-kiel.de; +49(0)431-8814-258)