Will EU impose tariffs on battery electric vehicles from China?

Today, the European Commission's proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs. This represents another step towards the conclusion of the Commission's anti-subsidy investigation.

Is the EU battery industry losing out to foreign competition?

At the same time, the EU battery cell import tariff is the lowest compared to China (10% for EU) or the US (10.9% for China), at a mere 1.3% currently. Without decisive protective and supportive measures, the EU battery industry risks losing out to foreign competition.

Can EV batteries be exported to the UK?

As the European EV batteries sector is not sufficiently developed, the parties have agreed to extend the current rules until 2027. In 2022, the United Kingdom (UK) was the EU's second biggest export destination for cars, accounting for 17 % of total exports, halfway between the United States (23 %) and China (15 %).

How much will a 10 % tariff cost the EV industry?

In the run-up to the deadline, EU and UK carmakers issued numerous warnings signalling that they could not meet the heightened requirements. The European Automobile Manufacturers' Association (ACEA) estimated that a 10 % tariff could cost the industry €4.3 billion, potentially reducing EV production by nearly 500 000 units.

Should China invest in a battery in Europe?

Many Chinese players are already planning battery investments into Europe. Similar to previous trade disputes, an amicable solution can be found. This can include a lower tariff up to a certain volume of imports (e.g. 10-15% of the market) at an agreed minimum price, with the higher tariff kicking in afterwards.

Does the UK export EVs to the EU?

The EU is the UK's largest market for total vehicle imports and exports (see chart). Importantly, both parties have legal commitments not to sell new cars with combustion engines from 2035 onwards. The volume of trade in EVs is already significant. In 2022, the UK exported more than 47 000 EVs to the EU with a total value of €1.2 billion.