Tariffs on Electric Vehicles From China – What is Happening

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News from the US this week has sent shockwaves through the Chinese car market. President Joe Biden has announced that he intends to impose 100% tariffs on electric vehicles from China, and there are worries that this will spread through Europe and the UK.

In this blog post we will examine why the Americans have decided to take such a stance, plus whether Europe and the UK is planning to follow suit. We will also discuss the possible impacts to the consumer of such a decision.

Will the UK Impose Tariffs on Electric Vehicles From China as Well?

At the present time, the UK has not imposed tariffs on electric vehicles from China. However, this could change in the near future. The tipping point will be whether it is discovered that the Chinese manufacturers are benefiting from government subsidies. This unfair advantage would allow the Chinese companies to benefit from higher sales due to lower point of sale prices.

These worries seem to have been confirmed in a study by the US-based Centre for Strategic and International Studies (CSIS) which states that Chinese manufacturers have received subsidies in the region of £78 billion. With a massive investment like this, it is easy to see why there are concerns for domestic automotive companies.


The Effect on the Consumers

The effects will be different for consumers in the US and in the UK. In the US, for example, although there are some great domestic EV brands, the electric revolution is still lagging behind. Not only is the electric grid and the charging network quite a long way behind us in Europe, there is also less enthusiasm for electric vehicles in general. Of course, in a nation where oil production is a major industry, it will take some time to get people to make the change. There is also a much bigger “buy domestic” attitude.

The UK on the other hand has really embraced EVs. Our charging network still has some way to go, but it is pretty darn good for where we are at present. The main factor holding people back is the price of the vehicles themselves. We, as a nation, have been looking forward to a big influx of cheaper electric cars to make the change more realistic for more people. If tariffs are imposed it will negatively affect the consumers.

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Is There a Middle Ground Solution

What we would like to see is a big drop in the price of electric vehicles in Europe. With the price of batteries falling through the floor in recent years, it is surprising that electric cars still come on the market at a much higher price than their conventionally fuelled versions. It is felt by some that prices are kept artificially high to aid continuing sales of petrol and diesel vehicles. If this is true, then maybe this is something the government needs to address first.

Alternatively, subsidies for British manufacturing or imports should be considered to help bring the pricing down. Of course, this is unlikely to happen in the current climate of austerity. You do feel that something has to change. It seems unfair that consumers are paying the price for being overtaken by Chinese counterparts.

*All information correct as of 28/05/2024

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