AutoBeta(AutoBeta.net)08/22 Report--

On August 21, the China Association of Automobile Manufacturers (hereinafter referred to as "China Automobile Association") issued a document saying that it firmly opposes the European Commission (EC) imposing high tariffs on Chinese electric vehicles. It believes that the arbitration information seriously distorts the facts of China's electric vehicle industry, so it expresses strong dissatisfaction and firm opposition.

The China Automobile Association pointed out that the high countervailing duty levied by the European Commission on Chinese electric vehicles has brought great risks and uncertainties to Chinese enterprises operating and investing in Europe, and damaged the confidence of Chinese enterprises to operate and invest in Europe. it will have a serious adverse impact on promoting the development of the EU automobile industry, increasing local employment opportunities in the EU, and achieving green and sustainable development.

On August 20, local time, the European Commission disclosed to the relevant parties a draft decision to impose a final countervailing duty on pure electric vehicles imported from China. The final tariff rate has been slightly adjusted compared with the previously announced temporary tariff rate. Among them, BYD, Geely Automobile and SAIC will levy 17.0%, 19.3% and 36.3% respectively, 21.3% for other cooperative companies and 36.3% for other non-cooperative companies. Tesla, as a Chinese exporter, implements a separate tariff rate of 9% at this stage. In addition, the European Commission also decided not to impose countervailing duties retroactively.

For comparison, documents released by the European Commission on June 12 show that tariffs of 17.4%, 20% and 38.1% will be imposed on BYD, Geely Motor and SAIC respectively, and 21% or 38.1% will be imposed on other manufacturers. On July 5, the European Commission imposed temporary countervailing duties on electric vehicles imported from China for a maximum period of four months. According to the announcement at that time, BYD kept the tax rate unchanged at 17.4%, while Geely and SAIC were reduced to 19.9% and 37.6% respectively from 20% and 38.1%, respectively. Other Chinese car companies that cooperated but were not sampled will be subject to a weighted average tariff of 20.8%. The tax rate for uncooperative car companies is 37.6%.

By contrast, the final adjudication tax rate has been slightly reduced, but by a small margin. Among them, BYD decreased by 0.4%, Geely by 0.7%, and SAIC increased by 1.8%. In addition, the tax rate of 17 other companies cooperating with EU investigations also increased from 20.8 per cent to 21.3 per cent, while Tesla enjoyed a 9 per cent separate special countervailing rate.

The European Commission has previously said that the reason for the tariff increase is due to high subsidies in China's electric vehicle industry, but this reason is not recognized because China's subsidies for the purchase of new energy vehicles have continued to decline since 2018. It has not been completely out of the market until 2022. However, since the announcement of this measure, a number of car companies and Chinese associations have made strong statements.

In response to the European Commission's pre-disclosure of the final measures of the anti-subsidy investigation into electric vehicles in China, EU Chinese businessmen expressed strong dissatisfaction and firm opposition to this protectionist practice of the European Commission. The EU-China Chamber of Commerce stressed that the advantages of making electric cars in China are not based on subsidies, but on industrial scale, overall supply chain advantages and fierce competition in the market. The European Commission's unfair use of trade tools to hinder free trade in electric vehicles will only hurt the resilience of the European automobile industry itself, impact a level playing field and the EU's own green transformation, and aggravate trade tensions between China and the EU. Send extremely wrong signals to global cooperation and green development.

In addition, a spokesman for the Ministry of Commerce said that the Chinese side has repeatedly pointed out that the European countervailing investigation against China's electric vehicles presupposes the conclusion that the practice in all aspects of the investigation violates its promised principles of "objectivity, impartiality, non-discrimination and transparency". It is also not in line with WTO rules, and it is a practice of "unfair competition" in the name of "fair competition".

A spokesman for the Ministry of Commerce said that the final disclosure released by the European side did not fully absorb the views of the Chinese side, still adhered to the wrong practice, cut high tax rates, and used sampling to treat different types of Chinese companies, distorting the results of the investigation. The disclosure of the final award is based on the "facts" unilaterally recognized by the European side, not the facts agreed by both sides, which the Chinese side firmly opposes and is highly concerned about. Since the end of June, China and the EU have conducted more than 10 rounds of technical consultations on this case on the basis of facts and rules. With the utmost sincerity, China has been committed to properly handling trade disputes with the European side through dialogue and consultation, and hopes that the European side will earnestly face China and speed up the exploration of appropriate solutions in a rational and pragmatic manner. Take practical actions to avoid the escalation of trade frictions. China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.

In addition, SAIC also responded to the incident today. SAIC said that due to factors such as overseas pressure from Europe and the United States, SAIC's overall sales fluctuated in a short period of time this year and will make every effort to make up for it and strive to achieve a month-on-month increase in sales. The European Commission plans to make a final ruling no later than October 30. According to the European Commission's determination, SAIC will take further legal measures to actively safeguard its own rights and interests in the light of developments. SAIC believes that only through open dialogue and cooperation can we overcome challenges and achieve win-win results. ‍

It is understood that after the pre-disclosure of the final countervailing ruling by the EU, the final proposal will be voted on by the 27 EU member states in October. At that time, if the vote is passed, the additional tariff will be raised from an interim bill to a five-year tariff policy, and a final ruling will be made before November 4.

At present, the Chinese government has appealed to the World Trade Organization (WTO). According to foreign media reports, the number of Chinese electric vehicle registrations in Europe fell 45% in July compared with June, according to foreign media reports, with the MG brand down 20% and Polaris down 42%; the share of Chinese electric vehicles in Germany fell to 8% from 13% in June; and France fell from 8% to 5%.

In response to the EU's imposition of tariffs on Chinese electric vehicles, industry insiders believe that European countervailing duties will affect not only Chinese manufacturers, but also European companies and their joint ventures to a greater extent, further making electric vehicles more expensive in the European market, resulting in more losses for car companies and European consumers. People in other industries pointed out that this decision undermines trade rules and harms others and harms themselves, and the EU's countervailing investigation is bound to eat itself up.

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