The EU's punitive tariffs on all Chinese electric cars are a reality. But the car brands from the communist dictatorship have no intention of giving up just yet.
Chinese electric cars avoid the EU's punitive tariffs by betting on new strategies that have already begun to prove effective.
One of the main methods used by Chinese automakers is to shift focus to plug-in hybrids. These cars fall outside the scope of the new tariffs that the EU introduced in November.
The EU has imposed punitive tariffs of up to 45.3 percent on electric cars manufactured in China. This affects, among others, Volvo and Polestar, which produce cars in China.
The brands, which are part of the Geely group, face a punitive duty of 18.8 percent on top of the existing duty of 10 percent. To circumvent these economic burdens, Chinese automakers have already adjusted their production and exports.
According to Reuters, the manufacturers plan partly to move a large part of production to Europe and partly to increase investments in plug-in hybrid cars.
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These cars are not yet covered by the new penalty rates, and the market for them is expected to grow by 20 percent in 2024.
– The increase is driven by Chinese manufacturers switching to plug-in hybrids as a way to circumvent the new EU tariffs on electric cars imported from China, says Murtuza Ali, analyst at Counterpoint Research, to Reuters .
Although plug-in hybrids have potential in Europe, the situation in Denmark is different. Here, the demand for this type of car has fallen significantly.
The market share for plug-in hybrids has been reduced from almost 11 percent to just over 4 percent. This development stands in contrast to Sweden, where interest in hybrid cars appears to be increasing.
Despite declining interest in certain markets, China tripled its exports of hybrids over the course of the third quarter. This indicates that manufacturers are purposefully trying to expand their market shares in Europe by adapting to the new regulations.
Chinese automakers' shift to hybrids shows how they are quickly responding to changing trade conditions and the EU's attempts to protect its auto industry. The Chinese have already threatened to strike back by placing tariffs on the most expensive of the cars that the European brands also sell in China.
However, several European car brands can already note how the Chinese market, which is the world's absolute largest, is shrinking under them. Audi, for example, is trying to save the business by creating a completely new car brand. Read more about it here .
