Almost a month ago, the United States imposed a tariff of up to 100% on electric vehicles (EV) imported from China in order to ensure that the local EV industry would be better protected from competition. Yesterday the European Union (EU) also introduced new tariffs on Chinese EVs for the same reason.
EVs manufactured in China will be subject to tariffs ranging from 27.4 to 38.1% depending on the cooperation given by the manufacturers during the investigation carried out on the Chinese motor industry. The EU imposed only a 10% tariff on EVs imported from China previously with China imposing a 15% tariff on EU-produced EVs in their country. In addition to BYD and SAIC, Tesla was also affected by this new tariff.
Although the EU announced new tariffs yesterday, not all member states agreed with them. Germany, for example, said the tariffs imposed would cause losses to all parties, while France and Spain supported it. Germany resisted because it did not want to see China respond to the EU's actions by doing the same.
China is currently the world's largest exporter of EVs and BYD is the largest manufacturer. Subsidies provided by the Chinese government help local EV manufacturers to offer vehicles that are sold at more affordable prices than competitors. This simultaneously threatens European vehicle manufacturers who are falling behind in terms of technology and product offerings.
Malaysia does not impose any tariffs on imported EVs. This EU action may have a positive impact on Malaysia with Chinese manufacturers offering more affordable EVs in the local market to gain the largest market share as long as tariffs are not imposed.