178

BREAKING NEWS: EU Commission announces preliminary tariffs up to 38% on Chinese EVs (www.euractiv.com)

submitted 4 months ago by MicroWave@lemmy.world to c/world@lemmy.world

49 comments fedilink hide all child comments

The EU will impose additional tariffs of 17.4% to 38.1% on electric cars produced in China, the European Commission announced on Wednesday (12 June), as preliminary results from its anti-subsidy investigation confirmed prices are being distorted by Chinese state support.

The value chain of Chinese electric cars “benefits from unfair subsidisation, which is causing a threat of economic injury to EU battery electric vehicles producers,” EU Commission Vice-President Margaritis Schinas said on Wednesday (12 June).

“When our partners breach the rules, we will assert our rights,” Executive Vice-President Valdis Dombrovskis said in a statement.

“Today we have reached a milestone in our anti-subsidy investigation,” he said, adding that “this is based on clear evidence of our extensive investigation and in full respect of WTO rules.”

Duties will differ per carmaker, with Chinese state-owned manufacturer SAIC facing the highest duty at 38.1%, Chinese Geely to face 20% and BYD 17.4%.

top 49 comments

sorted by: hot top controversial new old

[-] Moonrise2473@feddit.it 54 points 4 months ago

so:

car dealers don't want to sell EVs, you need to push them otherwise they'll try to sell an ICE model
car makers have collectively decided that EV = luxury vehicle that must be sold at least for 45k
car makers don't really want to make EVs - when the government they introduce a tax subsidy, they increase the price by that exact amount (VW Up for example, they decided that it could be never to sold 5k over the ICE model - when the government increased the subsidy, VW increased the price, and when the subsidy rose to 13k they discontinued the model as it would cannibalize sales of other models)
charge point operators just want to get the european funds to install chargers, but then they're going to neglect any kind of maintenance, to the point that for enelx fast chargers it's the norm to find them broken or out of service and the exception when they work as intended.
charge point operators also don't really want to sell electricity, so they set a 2000% markup. Paying electricity for 1 euro per kwh it's like paying gas at 3 euro per liter
charge point operators have collectively decided that in order to pay for the charge, customers must use the most user-unfriendly process as possible. Can't just accept credit card at the POS with lower fees, no, must register on the proprietary app, search for the charger on the map that almost always requires google play services, find it, guess which of the 8 pins on the map is the right one, hope that unlocks, and so on.

it's almost a miracle that you can see people driving an EV in italy

[-] Quik@infosec.pub 5 points 4 months ago

The point with EVs being over 45k is mostly the extremely pricey battery, China just subsidized until their cars are at a better price, the EU wants to protect European car manufacturers, that’s that.

[-] wewbull@feddit.uk 21 points 4 months ago

Battery prices are now close to $100 per kWh and are predicted to keep dropping.

https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html

That's $7k for the 60-70kWh battery we see in lots of cars. That's offset against an engine that has multiple hundreds of moving parts, also worth several thousand.

[-] cogman@lemmy.world -2 points 4 months ago

The engine has hundreds of parts but really only a couple of them are moving. That's the beauty of electric motors.

[-] ShepherdPie@midwest.social 10 points 4 months ago

They're comparing against the price of an ICE engine and the fact that they don't contain one to offset the cost.

[-] bluGill@kbin.run 0 points 4 months ago

But they do have an expensive electric motor instead of the ICE, plus an expensive battery.

[-] Tja@programming.dev 4 points 4 months ago

Electric motors are substantially cheaper (and simpler, and lighter) than internal combustion. Hell, the typical ICE has two electric motors already in it! (starter, alternator)

[-] bluGill@kbin.run -1 points 4 months ago

Electric motors are substantially cheaper (and simpler, and lighter) than internal combustion

Not really. There is a lot of metal - wires - in the electric motor. Retail prices on motors is a lot higher than the retail price on an ICE. https://www.grainger.com/product/WEG-IEEE-841-Motor-250-HP-15G092 is a 250 horse power motor for $30k. https://www.jegs.com/i/Chevrolet-Performance/809/19435110/10002/-1 is a 500 horsepower ICE (I think this is new, but the site also sells rebuilt engines) for $7k.

Of course with motors there are a number of different ways to built them at different costs. However they are not cheaper than an ICE and we shouldn't expect that they would be as there is a lot of metal in a motor.

the typical ICE has two electric motors already in it! (starter, alternator)

Sure, but they are small, neither one is capable of moving your car down the road at full speed (the starter might do it for 10 seconds but then it will overheat)

[-] Tja@programming.dev 3 points 4 months ago* (last edited 4 months ago)

You have whole (electric) cars for 30k, that price is laughable. Here you have 220kw (300HP) motor, inverter and differential for 3.5k euros: https://eveurope.eu/en/product/tesla-model-s-drive-train-220-kw-2/

The price difference between a single motor VS dual motor on most cars it's also around 5k, including extra cables, installation, etc.

[-] bluGill@kbin.run 2 points 4 months ago

I can't find any source for the type of motor used in electric cars - which presumably will be made in larger quantities bringing costs down.

[-] ShepherdPie@midwest.social 1 points 4 months ago

A motor basically consists of copper wire and magnets neither of which are expensive materials.

[-] bluGill@kbin.run 2 points 4 months ago

An engine mostly consists of iron and aluminum which is much cheaper than copper. (cars makers are looking at if they can use aluminum wires in their motors - I'm not sure on status of that)

[-] ShepherdPie@midwest.social 3 points 4 months ago

Yes with hundreds or thousands of parts that all need to be cast or machined to tolerances as tight as a few thousandths of an inch. Electric motors just need copper wire wrapped around in circles and a shaft with magnets attached to it. It's very basic. I get that you want to be right but you're not going to win the argument that electric motors are more expensive or costly to produce than an internal combustion engine.

[+] bluGill@kbin.run -9 points 4 months ago

An engine is not thousands of dollars. They mass produce them and so the incremental cost for each one is less than $100 each. There is a lot of engineering costs in an engine, and the cost to setup mass production is high, but that is amortized over all the cars they put that engine in. (there is a reason auto maters only have a few engines that they put in everything)

A battery is $7000, but the raw materials and labor to make it are a large part of that price (I don't have insight on what the price is) Of course auto makers know they need a lot of batteries and so are working on automation to bring the per battery cost down.

[-] echutaa@programming.dev 13 points 4 months ago

An engine would scrap for more than $100 you’ll have to cite that figure to make it believable.

[-] bluGill@kbin.run -4 points 4 months ago

Last I checked the whole car scrapped for $250, and there is a lot more metal in the rest of the car (transmission, drive train..) than the engine.

Engines are worth more than $100 if they are rebuild-able. However the incremental cost to the automaker is less than $100. Remember, incremental cost does not include the cost of engineering, setting up the assembly line, or profit margin (which are all very expensive and raise the actual cost) - just the raw materials and labor to run the line.

[-] echutaa@programming.dev 6 points 4 months ago

No citations and more outlandish claims. So I’ll put a little math here. From the first google results aluminum scraps around $0.44/lb and a smaller engine block is about 300lb which comes out to $132, not including heads manifolds, pistons etc.

[-] zephyreks@lemmy.ml 3 points 4 months ago

Lmao if you can build a reliable car engine for $100 I'll give you a billion dollars for a car startup that will outcompete everyone else.

[-] bluGill@kbin.run -1 points 4 months ago

You fail to understand the difference between incremental costs and full costs. A modern car engine can be under $100 each for materials and assembly labor. However that does not count the costs of engineering, or building the assembly line, much less profit margin. Those costs are much higher in an EV.

[-] zephyreks@lemmy.ml 2 points 4 months ago

"Subsidized until their cars are at a better price"

What do you think subsidies are? Do you think China is paying $10k for each export sale? Do you think China is just hemorrhaging money so that they can bump sales numbers up?

China dumped billions of dollars into a domestic fast charging network that aggressively stimulated domestic demand and dumped billions of dollars into clean energy initiatives to make sure that electricity prices hover around 1RMB/kWh ($0.14/kWh). How much is electricity in Europe? How much is it in the US?

China offered $1750 in purchase-side tax incentives that have since been phased out. How much are the American purchase-side tax incentives passed by the IRA? Are they still ongoing?

Shanghai gave Tesla hundreds of millions in low-interest loans to set up a factory in Shanghai as opposed to, say, Jiangsu, in exchange for billions of dollars in investment. How much did Tesla's Nevada Gigafactory receive in subsidies?

Plus, let's take a look at who's actually exporting cars to Europe:

MG (SAIC), Volvo (Geely), Tesla, and European joint ventures (BMW, Renault, Volkswagen, etc.)

China has been subsidizing the infrastructure for EVs, absolutely, but subsidizing infrastructure is not illegal. If Europe wants to protect its domestic car manufacturers, the first thing it should look at is Tesla. There's also a reason BMW, Volkswagen, and Mercedes oppose tariffs: these risk retaliation against their currently rather unfettered access to the highly profitable, rapidly growing premium car market in China. They're seeing upwards of 10% YoY growth in their luxury car lineups.

The EU Commission is stabbing itself in the chest to save its face. von der Leyen is pursuing a personal vendetta against the best interests of German automakers, completely forgetting the fact that while 10% of Chinese car production is exported, about 70% of German car production is exported. Meanwhile, while Chinese cars predominantly target the lower end of the market, German cars for export are overwhelmingly premium and luxury vehicles. Just an insane policy that seems to be more political pandering than anything else.

[-] FlyingSquid@lemmy.world 24 points 4 months ago

Oh thank goodness, the fossil fuel industry is preserved just a little while longer!

[-] maynarkh@feddit.nl 22 points 4 months ago* (last edited 4 months ago)

I think that there was just no good choice in this matter. I mean, look at how great it turned out for Europe to bond together with Russia over cheap gas. I know that cheap gas and electric cars are not the same thing, by far, but still, if we got dumped by electric cars in China, we'd be wide open for economic attacks like it happened just a few years ago.

That said, I'd love if we compensated for this by finally shifting subsidies from flights to rail, or by shifting from 100LL to 100UL in general aviation, or cracking down on ships using bunker fuel.

Or put the screws on BMW and VW to pull their heads out their asses and start being competitive.

[-] FlyingSquid@lemmy.world 10 points 4 months ago

If this tariff went along with a law saying that all European cars had to be electric by a certain date, I'd feel like this was anything but just preserving Europe's fossil fuel interests.

[-] rettetdemdativ@discuss.tchncs.de 18 points 4 months ago

I mean there kind of is. As is stands, selling cars that emit CO2 will no longer be allowed after 2035. You could argue that that's far too late, and I would agree, but there is a date and since car manufacturers usually plan ahead (I hope), there probably won't be many fossil fuel-powered cars by then. It is, however, not strictly limited to electric cars. It just is not allowed to emit CO2.

[-] FlyingSquid@lemmy.world 8 points 4 months ago

Okay, fair. I was not aware of that.

[-] rettetdemdativ@discuss.tchncs.de 9 points 4 months ago

In case you're interested:

https://www.europarl.europa.eu/topics/en/article/20221019STO44572/eu-ban-on-sale-of-new-petrol-and-diesel-cars-from-2035-explained

[-] FlyingSquid@lemmy.world 6 points 4 months ago

Thank you!

[-] bstix@feddit.dk 6 points 4 months ago

Just adding: Wikipedia has a nice article including a map showing the current status of when countries plan to phase out fossil fuel vehicles. It also has a section on which manufacturers have pledged to do so.

https://en.m.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles

Long term politics seem to be a really good strategy for this. Notice how USA is marked as green, even if its only some states who have agreed to do so, and some countries are just grey. However, this is fine, because the manufacturers will still need to make the switch long beforehand in order to keep selling vehicles worldwide.

[-] xep@fedia.io 6 points 4 months ago

Tariffs are the most straightforward way to deal with dumping. Hard to fault the EU for this approach.

[-] zephyreks@lemmy.ml 4 points 4 months ago

"Dumped"?

The fuck do you think China is doing? Donating EVs to charity?

[-] maynarkh@feddit.nl 4 points 4 months ago

Selling EVs below the profitable rate to corner a market and destroy competition. You know, the economic term "dumping".

[-] zephyreks@lemmy.ml 4 points 4 months ago

Below the profitable rate? Last I checked, Chinese EV manufacturers were either making money hand over fist or getting BTFO's of the market by those that could.

[-] maynarkh@feddit.nl 7 points 4 months ago

Good for them. The point is not that they are doing "bad things". "Dumping" is not a curse word, it's an economic strategy, one that's practised by a whole bunch of companies, and not just Chinese ones. When Auchan is selling watermelons at a rate where they barely make any money over a single sale - but make a ton of money on other stuff you get while shopping for watermelons, it destroys farmer's markets, for example.

All I'm saying is that the choice before the EU leadership was either letting Chinese EVs into the market and risk getting into a position where Chinese companies - and by extension the Chinese government - can pull the levers on the EU car market, in exchange for us getting to buy cheaper EVs right now.

The EU - and you can fill in the blank whether they did it because they wanted to protect EU carmakers' business, or they wanted to prevent another situation similar to the one with Russian gas - decided that the risk is not worth it. My guess is that some voted as they did because of the former, others because of the latter. That said, you can't really say that the EU would be "crooked" for either of these things, as fighting for the EU car industry against other countries' car industries is well within their mandate, as is protecting the EU's strategic political autonomy.

It's just how things are, like with the great firewall. If someone wants to sell software services to China, they have to conform to their standards. You can say it's good or bad, but that's just how things work. As a European, I don't care about this specific issue either way, we should be buying fewer cars, electric or otherwise. People who live in places in the EU where you need cars because there's no good public transport also tend to be living in places where you can't afford to buy new anyway, not even at BYD prices.

[-] zephyreks@lemmy.ml -1 points 4 months ago

I agree, dumping is well-defined. Here's the problem, though:

Chinese EV manufacturers are selling their cars domestically for far less than they are in Europe. They're already price-gouging their European customers. Moreover, only something like 10% of Chinese car production is made for export, and much of that is by European/American brands that are only producing in China because of the cost advantage. This is compared to 70% or more in the case of Germany and Japan.

There's a far stronger case for overcapacity and dumping from Germany and Japan than there is for China. It's an absurd bending of WTO rules to align with, as you said, protecting EU carmakers.

It's protectionist policy, and that's fine, but it should be clear to everyone that dumping and overcapacity are bullshit justifications for it. I absolutely agree with you that it should be a part of the EU mandate to protect EU workers and EU businesses. I don't disagree with the tariff, I just don't like the justification being given for it.

[-] Gsus4@programming.dev 1 points 4 months ago* (last edited 4 months ago)

Electric cars will not solve climate change, public transport even if it wasn't fully electric could...but nobody seems to give a shit about that :/

[-] FlyingSquid@lemmy.world 3 points 4 months ago

No one said it would solve it. Using ICE cars will make it worse.

[-] bstix@feddit.dk 15 points 4 months ago

Just for the record: Some cars from BMW, Dacia, Renault and Tesla are also imported from China and will get a 21% tariff as well. Probably lots of other brands as well.

It will be interesting to see if they will attempt to pull production back home.

VW seems to have an advantage by already going into fully domestic production, but they still need to prove that they can match the pricing.

[-] nutsack@lemmy.world 2 points 4 months ago

I think they would need far steeper tariffs to get manufacturing to move out of China

[-] bstix@feddit.dk 1 points 4 months ago

These are in addition to the existing 10% car tariff.

Also keep in mind that there are large car registration taxes and VAT in Europe. While this applies to all cars imported or not, it does increase the difference in net price.

[-] zephyreks@lemmy.ml 1 points 4 months ago

It doesn't help that they're getting absolutely eaten out of the Chinese ICE market. It's a rough time to be an ICE car manufacturer.

[-] zephyreks@lemmy.ml 14 points 4 months ago

I'll tell this story in three parts:

Tesla's US subsidies
China's EV exports
China's "overcapacity"

Part 1.Tesla's US subsidies. Under the US' Inflation Reduction Act, purchases of new EVs made in the USA were given a tax incentive of $7500. Previously, states such as California has other incentives such as the $7500 incentive under CVRP. How much in subsidies has Tesla received from tax credits alone under the IRA in 2023, ignoring state-level benefits and carryover from pre-2023 benefits? 654000 sales, for a total of almost $5 billion dollars in purchase-side government subsidies. For 2023. We also know that Tesla has received billions in state-level government funding to set up factories in California, and billions more in government funding for their other various efforts. In comparison between 2009 and 2022, China handed out about $28 billion in EV subsidies, much of that at the state-level to encourage companies to set up factories. In fact, Tesla received huge subsidies to set up it's factories in Shanghai. By the end of 2022, China had phased out most purchase-side subsidies (except some lingering programs that are not set for renewal). Note that the maximum purchase-side subsidy was about $1750. China's most significant subsidy today is in it's expansion of the domestic charging network: China makes up 68% of the world's charging stations, with a huge number of them being fast chargers. Much of that expansion came out of government coffers and is a huge driver for EV adoption in China.

Part 2. China's EV exports. In 2022, China's EV exports were as follows, sorted by volume:

270k - Tesla

140k - SAIC (mostly under the British brand MG)

72k - European joint ventures

55k - BYD

(others)

So, let's be more clear about what the EU means: they don't like that foreign companies (including European ones, but mostly Tesla, and almost all European/American brands) are setting up shop in China to produce cars for export.

Part 3. China's "overcapacity". It's no secret that China has pitiful O&G reserves. Oil, notably, is needed for ICE vehicles, but not for EVs. That is, the switch to EVs is a matter of national security for China as it reduces Chinese reliance on foreign oil supplies. Indeed, a huge proportion of Chinese EV production is going to the domestic market, and exports make up only about 10% of total sales (for reference, this number is more like 70% for Toyota).

To sum it up: unlike Toyota/Japan (and others), China is consuming the vast majority of its production. Meanwhile, a huge number of it's exports are from foreign companies. It's most notable exporter is Tesla, which is notable for having received $5 billion in purchase-side tax incentives in 2023 in the US... Alone. This is compared to $28 billion between 2009 and 2022, most of which have been phased out, and for which a big proportion was to encourage setting up factories in specific provinces or to build out a domestic charging network.

Edit: to clarify, China does have more car factories than they know what to do with. This is because ICE companies are getting fucked by EV companies. All those factories dedicated to producing ICE cars? Fucked. Idling. Useless. Sales of all cars in China: Volkswagen (-0.2% YoY), Toyota (-3.8% YoY), Honda (-12.3% YoY), Nissan (-14.3% YoY). The only foreign brands that are staying alive in China are EV brands like Tesla (+20% YoY) and luxury cars like BMW (+7.8% YoY) and Audi (+11.3% YoY). These idling ICE factories are currently being closed by the government and the government is limiting licenses handed out for new factories.

Ironically, Tesla is a large part of the reason why Chinese EVs are so cheap because they started the price war... They just couldn't win it.

[-] mlg@lemmy.world 11 points 4 months ago

Hey it could be worse

It could be a 100% tax like the USA

Could also be roads full of boat sized junk from Ford, GM, and Chrysler.

[-] Not_mikey@slrpnk.net 8 points 4 months ago* (last edited 4 months ago)

China subsidies vehicles, say €5000

EU tariffs vehicles, say €5000

Every vehicle purchase basically comes with €5000 from the Chinese government for the EU government

The CCP doesn't want you to know this one simple trick

[-] best_username_ever@sh.itjust.works 7 points 4 months ago

BYD+18% or a too expensive European car, I know what I'll get. Anyway, we don't have cars fully "made in France" here, car makers should be ashamed of themselves as they mostly rely on those taxes to prevent competition.

[-] Handrahen@lemmy.world 2 points 4 months ago

This is such bullshit. The EU is supposed to be encouraging EV adoption. There's a market NOW for affordable EVs it will take years for European car companies to get into. The EU needs to help these companies produce affordable EVs faster, not block Chinese companies from providing a solution in the meantime. Climate change is already a crisis. We need to be doing everything possible to reduce its escalating effects.

[-] Varyk@sh.itjust.works 2 points 4 months ago* (last edited 4 months ago)

Boy oh boy, is that ever not enough if they want to stop Chinese EVS. They'll need a 200% tariff just to compete with Chinese EV prices.

And those Chinese EVS are exceeding European/American Auto safety standards.

$9700, $11,000, $15,000 USD for a new car

https://electrek.co/2024/03/06/byd-launches-cheaper-seagull-ev-9700-price/

[-] bungalowtill@lemmy.dbzer0.com 0 points 4 months ago

Shut the fuck up about China having closer ties with Russia then.

this post was submitted on 12 Jun 2024

178 points (98.9% liked)

World News

38969 readers

2042 users here now

A community for discussing events around the World

Rules:

Rule 1: posts have the following requirements:
- Post news articles only
- Video links are NOT articles and will be removed.
- Title must match the article headline
- Not United States Internal News
- Recent (Past 30 Days)
- Screenshots/links to other social media sites (Twitter/X/Facebook/Youtube/reddit, etc.) are explicitly forbidden, as are link shorteners.
Rule 2: Do not copy the entire article into your post. The key points in 1-2 paragraphs is allowed (even encouraged!), but large segments of articles posted in the body will result in the post being removed. If you have to stop and think "Is this fair use?", it probably isn't. Archive links, especially the ones created on link submission, are absolutely allowed but those that avoid paywalls are not.
Rule 3: Opinions articles, or Articles based on misinformation/propaganda may be removed. Sources that have a Low or Very Low factual reporting rating or MBFC Credibility Rating may be removed.
Rule 4: Posts or comments that are homophobic, transphobic, racist, sexist, anti-religious, or ableist will be removed. “Ironic” prejudice is just prejudiced.
Posts and comments must abide by the lemmy.world terms of service UPDATED AS OF 10/19
Rule 5: Keep it civil. It's OK to say the subject of an article is behaving like a (pejorative, pejorative). It's NOT OK to say another USER is (pejorative). Strong language is fine, just not directed at other members. Engage in good-faith and with respect! This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban.

Similarly, if you see posts along these lines, do not engage. Report them, block them, and live a happier life than they do. We see too many slapfights that boil down to "Mom! He's bugging me!" and "I'm not touching you!" Going forward, slapfights will result in removed comments and temp bans to cool off.

Rule 6: Memes, spam, other low effort posting, reposts, misinformation, advocating violence, off-topic, trolling, offensive, regarding the moderators or meta in content may be removed at any time.
Rule 7: We didn't USED to need a rule about how many posts one could make in a day, then someone posted NINETEEN articles in a single day. Not comments, FULL ARTICLES. If you're posting more than say, 10 or so, consider going outside and touching grass. We reserve the right to limit over-posting so a single user does not dominate the front page.

We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.

All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.