Did a Dacia Spring cost more on arrival in Europe than a Tesla Model 3 or a BYD model? This is what is on the horizon with the plan to increase customs duties on imports of cars produced in China, confirmed by the European Commission this week. But a text that can still be amended and must above all be validated by the vote of the Member States, divided on this issue. If France and Spain are rather in favour of this increase in customs duties, this is not the case for Germany, Sweden and Hungary.
The most favorable regimes for Tesla and BYD
The stated aim of this increase in customs duties is to compensate for the public subsidies paid by Beijing to support the development of the local automotive industry, which is in the midst of a transition to electric power. This is too much aid in Brussels’ eyes, to the point of distorting competition with European players.
Tesla is benefiting from the most favourable regime for its Model 3 produced in Shanghai for Europe, with a 9% surcharge, compared to 21% in the initial project presented in June. A rate to be added to the customs duties normally levied on vehicle imports into the European Union, of 10%.
Chinese giant BYD is also doing quite well, with a 17% surcharge.
Another Chinese group, Geely, which owns Volvo and is associated with Mercedes on the Smart brand, received a rate of 19.3%.
Finally, SAIC, which markets the MG brand in Europe, is charged the highest rate, with a surcharge of 36.3%. This is the same rate as the group of “non-cooperating companies”, which refused to participate in the investigation launched by the EU.
Higher surcharge for Dacia and BMW
Another group is made up of “cooperating companies not included in the sample”, with an intermediate rate of 21.3%.
In this category we find the majority of joint ventures between European manufacturers and Chinese brands. Some examples: “eGT New Energy”, the joint venture between Dongfeng and Renault to produce the Dacia Spring, “Spotlight Automotive”, between Brillance and BMW for the iX3 or even “Volkswagen Anhui”, a joint venture between the German group and Anhui Jianghuai Automobile (JAC Group) to assemble the Cupra Tavascan.
These three models (Dacia Spring, BMW iX3 and Cupra Tavascan) will therefore be subject to higher import taxes than Tesla or a Chinese group such as BYD.
Renault Group, which owns Dacia, declined to comment, but says the brand is seeking to reduce its production and logistics costs to limit the impact of this potential increase in customs duties on its prices in Europe.
In France, this will be the second major blow in as many months for the Dacia Spring, following the loss at the beginning of the year of the eco-bonus, which is no longer reserved only for cars manufactured in Europe.
Incentives to produce in Europe
Taxing imports from European manufacturers more than those from the US or China: a surprising situation, but one that nevertheless responds to a certain logic. The European Commission considers that these partners of European manufacturers in producing in China have received too much support from Chinese public aid or access to preferential financing.
Public support could distort competition for the European Commission, which is not the case for Tesla, which also has a less opaque legal structure than Chinese brands, underlines an article in Les Echos.
Tesla, the only foreign manufacturer to produce in China without relying on a local manufacturer, already produces in Europe at its Berlin factory, where it assembles the Model Y. The project for a second European factory, which is often discussed, could however, if confirmed, also encourage Brussels to steer Elon Musk’s company in the right direction.
The same reasoning can also be applied to BYD, which has confirmed its factory project in Hungary, with the start of production planned for the end of 2025 and a second plant to be built in Turkey soon.
The SAIC Group, with its MG brand, which has seen strong growth in recent years in Europe, in particular with its compact electric MG4, has clearly not won its case after its appeal at the beginning of July and remains hit by the higher surcharge. MG France, however, assured that it had built up sufficient reserves to cope with the double impact of the end of bonuses and the European tax context.
It remains to be seen whether this planned tightening of screws in Europe will convince MG to produce locally, with a project for a factory in Spain still unconfirmed, reported the Journal de l’Automobile in mid-July.
Source: BFM TV
