The European Union attacked China's electric vehicles, BMW Tesla lay the gun
Europe is iron-hearted this time to start with Chinese-made electric vehicles.
On October 4, the European Union officially decided to launch a countervailing duty investigation into pure electric vehicles imported from China. In response, the spokesperson of China's Ministry of Commerce responded that the EU's behavior did not comply with relevant WTO rules, and would pay close attention to follow-up investigation procedures to firmly safeguard the legitimate rights and interests of Chinese enterprises.
The most ruthless thing is that the EU stick is not only hit on Chinese brands, but also overseas companies such as BMW and Tesla that export electric vehicles from China have also become the target of investigation.
The EU is waving this mess, and it doesn't matter if you are your own person.
Good quality and low price became the original sin
The reason why the EU started with Chinese-made electric vehicles this time is because they are cheap. The European Commission believes that Chinese electric vehicle manufacturers benefit from government subsidies, including government grants, preferential bank loans, tax incentives, etc.
These various forms of subsidies have allowed Chinese-made electric vehicles to enter the European market at low prices, and the share has reached 8% now, and it may reach 15% in 2025.
EV sales in China doubled to 5.9 million in 2022, more than double the total EV sales in Europe and the United States. The EU believes that the surge in sales of electric vehicles in China is mainly due to cheapness, with the best-selling cheap models selling for less than $5,000.
The large-scale entry of such cheap and large bowls of electric vehicles into Europe will make the European auto industry overwhelmed. Nearly half of China's car exports are now sold to Europe, up 60 percent last year, two-thirds of which are fully electric.
This scene makes Europeans feel familiar, in the 70s of the 20th century, high-quality and cheap Japanese cars entered the American market in this way, making European cars unable to fight back, and this leading edge continues to this day, the second highest share of the American car market is Toyota, second only to the local brand General Motors.
Muzzle aimed at "Made in China"
It should be noted that the EU's investigation of electric vehicles produced in China is not limited to Chinese brands, and those brands that sell Chinese-made electric vehicles to Europe, such as Tesla, BMW and Polestar, are not spared.
The biggest loss may be Tesla. The Shanghai Gigafactory is Tesla's most profitable and efficient, with two-fifths of the electric cars produced here for export, mainly to Europe. Tesla accounts for 40% of China's total electric vehicle exports to Europe.
In fact, although the EU regards Chinese electric vehicle brands as a flood beast, in fact, on the streets of European countries, there are still very few Chinese brand electric vehicles, and a large part of exports come from foreign brands such as Tesla and BMW.
On Friday, BMW Chief Financial Officer Walter Mertl confirmed that the European Union had asked BMW to provide information about the BMW iX3 cars it manufactures at its Chinese factories and exports to the outside world.
In 2020, BMW began to export the iX3 made in China to Europe, and in 2022, the total number of iX3 models exported from China will be about 15,000-20,000 units, and BMW will also export the next generation of MINI pure electric models from China next year.
As for the EU investigation, Walter Mertl believes that the result must do more harm than good, and that this will only protect those car companies that do not sell well in China, and affect every automaker that does business in China.
And if China takes countermeasures, the EU's investigation will be like a boomerang, and it will eventually hurt itself.
Regurgitation
The European Union sees China's electric vehicles as a flood beast, after all, for a long time, Europe exported far more cars to China than imported, but after the advent of the electric car era, everything has changed.
Today, Chinese consumers prefer local brand electric vehicles, with 80% of newly registered electric vehicles in China being Chinese brands. Not only that, in Southeast Asia, three-quarters of electric vehicle sales are also contributed by Chinese brands.
Europe, which sees the auto industry as the backbone of its economy and jobs, cannot watch Chinese-made electric cars sweep in, and they want to fight, but countervailing duty investigations and tariffs are the cure for the symptoms.
Once the EU confirms the imposition of tariffs on Chinese-made electric vehicles, it will indeed make China's electric vehicle prices rise in the short term and lose its competitive advantage. But Chinese brands are not vegetarian, and the price of Chinese brand rolls is our strength.
Electric car prices in Europe have been rising for the past eight years, while the average price of electric vehicles in China has halved. This is due to the comprehensive cost advantage of China's electric vehicle industry chain, including the advancement of battery technology and the sharp decline in cost.
Therefore, what the EU should do should not be to suppress China's electric vehicles, but to find ways to improve its competitive advantage as soon as possible and reduce production costs. As Volkswagen Group CEO Obermu said, "We should focus on creating competitive industrial framework conditions, as long as we are strong, we do not need to be afraid of competition." ”
And in the long run, if Europe wants to win the electric car race, the key is to rely on scale advantages and technological progress, and suppressing Chinese brands will only be counterproductive.
The German "Economic Weekly" published an article on October 4 pointed out that if the price of electric vehicles in Europe is artificially raised due to tariffs, it will only drag down the overall growth rate of electric vehicle sales in Europe, thereby losing the scale advantage and affecting the transformation of the European automotive industry to electrification.
The strength of the boomerang hurting itself is much more than hurting people.