<p><img src="https://hawk-oss.hawkinsight.com//picture//202406/1189179430_873.jpg" style="width: 100%;">Last year, China became the world's largest car exporter by sales, but the European Commission's investigation into Chinese electric vehicle subsidies launched in September last year has brought frustration to China.。Finally, yesterday (June 12) the European Commission (EC) concluded that China's pure electric vehicles (BEV) and their supply chains benefit from unfair subsidies.。Chinese electric cars imported into the EU have been slapped with a 10% tariff, but unless a settlement can be reached with Chinese authorities, an additional 17% will be imposed from July 4..4% to 38.New Tariff of 1%。-Advertising-It is easy to conclude that SAIC is the biggest loser because it is subject to tariffs of up to 38.1%, and is the only producer to impose a tariff of more than 21%。However, while SAIC is indeed a big loser, they are not the only company, and many of the ripple effects of tariffs may be quite surprising。According to data from the Peterson Institute for International Economics in the United States, the number of electric vehicles imported by the European Union from China increased significantly between 2020 and 2023, from 57,000 last year to about 437,000。However, most of the growth has been through stealth, and many imported cars are not easily identified as Chinese cars.。According to data from Schmidt Automotive Research, since 2021, through the first four months of this year, the penetration rate of pure electric vehicles made in China has been stagnant at around 20%。The only thing that has changed during this period is the mix of Chinese-made Chinese-branded cars with foreign-branded cars, where the proportion of Chinese-branded cars has risen from about 4% to about half of the total (10%)。The Merics chart shows that as of March 2022, in fact, only 2% of Chinese electric vehicles imported by the EU carry Chinese brands, of which 35% are Chinese-owned Euros, Polestar and other well-known brands。The chart shows that Tesla accounted for nearly half (49%) of imports, although the percentage appears to have declined since then.。- Advertising - Seres 5 and Seres 7 electric SUVs from China on display at the 2023 IAA Mobility show in Munich, Germany。Tesla may still be one of the biggest losers from EU tariffs。While the Model Y is now manufactured at the German plant, all Model 3 cars are imported to Europe from China.。Last year, Tesla's Shanghai plant produced 947,000 vehicles, of which about 600,000 were delivered to the Chinese market and the rest were exported.。Under the EU tariffs, Tesla will be subject to a 21% tariff on products imported from China a, Tesla has said that considering the tariffs, it is likely to raise prices in the EU from July 1, but has not disclosed the actual price increase.。Last year, the Model 3 was the second best-selling pure electric car in the EU, and the Model Y ranked first with 101,313 sales.。As we reported, Tesla has requested a separate review to determine tariffs, no doubt hoping to reduce the current 21% level.。Last year, the MG4 ranked sixth among the 10 best-selling pure electric vehicles in the EU, with 72,421 sales.。It is not clear how many electric cars SAIC sold in the EU last year, although the company sold a total of more than 200,000 vehicles in Europe (including ICE)。The State Administration for Industry and Commerce sent a letter on June 13 expressing its dissatisfaction with the ruling and reiterating its commitment to the principles of free trade and fair competition.。SAIC said it plans to start production in the EU, ironically SAIC had previously carried out CKD assembly at the UK's Longbridge plant until 2016, when the EU imposed a 38.top tariff of 1% because it believes that SAIC, as a state-owned enterprise, enjoys some of the highest subsidies。Last month we reported that SAIC, along with Ningde Times, BYD, FAW, Geely and Weishi, received 6 billion yuan (8.$2.7 billion) of solid-state battery R & D subsidies。MG Cyberster electric sports car at the MG booth of IAA Mobility 2023 in Munich, Germany。Last year, the 10th best-selling pure electric car in the European Union, Dacia Spring, was also made in China.。This is a typical feature of many cars currently sold in the EU that are obviously not made in China, including cars from brands such as BMW, Volvo and Polestar。-Advertising-Early signs of European production indicate that foreign OEMs are abandoning China as a production base for exporting electric vehicles。Earlier this year, Autocar reported that Dacia Spring production could move to Europe due to changing circumstances.。Currently, the car is produced by Dongfeng, with which Renault had previously entered into a joint venture。The most high-profile repatriation may be the BMW iX3。Existing generation starts production in 2020。At the time, BMW could choose to produce at any of three plants: Shenyang, China, Spartanburg, USA, or Pretoria, South Africa.。Considering the development mode of China's electric vehicle market, it is completely reasonable to concentrate the production of X3 electric version in Chinese factories。However, the next-generation iX3 will be produced first at BMW's new plant in Hungary and later also in China.。the hungarian plant will obviously handle eu and us destination d cars, which is likely to mean that chinese production is again limited to china。BYD Han and BYD Atto 3 electric vehicles show outside the BYD Brand Evening Event (part of IAA Mobility 2023) event in Munich, Germany。Only three Chinese producers, SAIC, Geely Automobile and BYD, were subject to sampling tariffs, while the rest were subject to a fixed 21 per cent tariff.。Volvo, Polestar, Zeekr and other brands controlled by Geely are subject to a 20% tax rate.。According to Schmidt Automotive Research, the Volvo EX30 was one of the biggest contributors to Chinese exports to the EU in April, but the model will shift production to Ghent, Belgium, in 2025.。Even Chinese producers are considering European production, which could certainly avoid tariff problems。Imposed 17.BYD plans to build a factory in Hungary with an annual capacity of 200,000 vehicles。Chery has chosen Buck's factory elona and zero-run models to be produced at the Stellantis factory in Poland.。At the same time, Great Wall is currently actively selecting locations from the shortlist, and as mentioned earlier, SAIC is also considering production.。If Tesla can't reach a deal with the EU, it could also be forced to build the Model 3 in Europe to circumvent tariff concerns.。The World Economic Institute in Kiel, Germany, estimates that the 20 percent tariff will lead to a 12 percent reduction in Chinese electric vehicles shipped to Europe..50,000 vehicles。We are not so easily convinced and believe that while some production will shift to the EU in the coming years, neither Chinese companies nor EU producers will prevent China from being used as an overall export base to the EU。For now, the Volkswagen Group does not appear to have changed its plans to export Cupra Tavascan from China.。Similarly, there is no news that BMW's joint venture with Great Wall to produce electric Mini models and exports will be affected。Dengshi D9 electric MPV at BYD booth at IAA Mobility 2023 in Munich, Germany。In addition, as we have previously reported, Chinese producers currently make much higher profits on cars sold in the EU than cars sold in China, partly because fierce competition in China drives down prices。If Rongding Group's prediction is correct, BYD could easily swallow 17.4% tariff and still make more profit than selling in China。It should also be noted that BYD's sales in Europe are still small, with only 9 registrations in the EU in the first four months of 2024,970。Another factor that many people don't seem to be talking about is that many of the numbers people use in the European market include the UK, which is no longer part of the EU and therefore not affected by tariffs.。The UK became one of the largest importers of Chinese cars (including electric vehicles) in 2022, partly due to links to the Chinese auto industry through brands such as MG and Lotus。Source: SAIC, Rongding Group, FASTER Technology,</p>