New customs duties on Chinese electric cars imported into Europe officially come into force on Thursday. Manufacturers will therefore have to determine the amount of compensatory duties to be imposed on them. And they will have to get out their cheque books very quickly.
Manufacturers have only had three weeks to negotiate with the European Commission. Too short a time to really hope to lower the bill. The prices announced by Brussels in June, at the end of its anti-subsidy investigation, should only be revised marginally.
“The manufacturers will have had just enough time to get Brussels to correct some serious errors in the figures, but they will not be able to come up with revolutionary arguments to reduce the score,” explains a person familiar with the matter. At best, a reduction of 0.1 to 1% is possible.
MG is the one who suffers the most
Among Chinese manufacturers, MG is the one that suffers the most, with compensatory customs duties set at 38.1%, compared to 20% for Geely and 17.4% for BYD. MG, owned by the SAIC group, which is in turn owned by the Shanghai state, “probably pays because of its proximity to the Chinese government, while BYD is a private company,” says an expert.
“It is also likely,” adds the expert, “that Brussels has sanctioned other companies that have not cooperated much during its investigation.”
Another plausible explanation: MG’s attack force. Today, it is the Chinese manufacturer that exports the most cars to Europe, more than 100,000 in 2023, according to the manufacturer, which anticipated Brussels’ decision. Firstly, since April it has been accumulating stocks in almost all of Europe, “to be able to maintain our prices until November,” explains an MG executive.
In France, double punishment
The company has done its calculations. The increase in customs duties could add an additional cost of 8,000 to 10,000 euros to an MG4 sold today for 25,000 euros. To cope with the Commission’s decision, the manufacturer also intends to sell more hybrid cars, especially in France. In France, 80% of cars distributed in 2023 were electric, compared to 30% on average in Europe. A figure that will undoubtedly be adjusted in the coming months.
“It is in France that the situation is most complicated for us,” the company confirms. “Between the loss of the ecological bonus and the new customs duties, it is no longer possible to maintain competitive electricity prices.”
As of Friday, MG, like all other electric car producers in China, BYD, Geely but also Tesla or Renault with its Dacia Spring, will have to pay compensatory customs duties to the European Commission. The money will be deposited in a special account and will not be collected until autumn.
In fact, for these new prices to become final, all 27 countries must still agree. The proposal will be rejected if a qualified majority (of at least 15 countries representing 65% of the EU population) opposes it. Between now and autumn, dissatisfied manufacturers and governments will have time to sharpen their knives and perfect their arguments to get Brussels to revise their copy.
Source: BFM TV
