EV shipments to Europe soar ahead of planned EU tariffs

BLOOMBERG

Geely Automobile Holdings’ Zeekr electric vehicles bound for shipment to Europe at the Port of Taicang in Taicang, Jiangsu province, China, on Aug. 24, 2023. EV shipments from China to Europe are spiking ahead of new European Union tariffs that effect in late October 2024.

China exported more than 60,000 electric vehicles to the European Union in September, with shipments jumping to the second-highest level on record ahead of additional tariffs expected to take effect at the end of this month.

Automakers from Asia’s biggest economy shipped 60,517 EVs to the 27 nations in the European trade bloc last month, up 61 percent from last year, according to customs data. The previous peak of 67,455 vehicles was in October 2023, when the European Commission announced that it was launching an anti-subsidy investigation into China-made EVs.

The EU introduced provisional duties in June and required targeted companies to set aside guarantees, but officials said in August the bloc wouldn’t collect them retroactively. Member states voted on Oct 4. to impose new tariffs of up to 35 percent, with 10 countries including France, Italy and Poland in favor of the measure. While China and the EU continue to negotiate an alternative solution, it’s expected the tariffs will take effect at the end of October.

The surge in shipments suggests that Chinese EV makers are hoping to avoid impending tariffs. Regardless, such measures are expected to slow but not deter those keen to expand into the lucrative European market. Chinese cars can often be sold at a greater preimum versus what they would fetch back home, spelling fatter margins for automakers.

BYD Co. plans to set up production in Hungary and Turkey, and other manufacturers including Xpeng Inc. and Zhejiang Geely Holding Group Co.’s premium EV brand Zeekr say they’re considering localizing production.