Chinese carmakers may pause investment in some EU countries
Chinese automakers were told by the Ministry of Commerce that they should put the brakes on big investment plans in EU countries that back extra tariffs on Chinese-built EVs, sources told Reuters.
China has told its carmakers to pause major investment in European countries that back additional tariffs on Chinese-built EVs, according to Reuters.
The new EU tariffs of up to 45.3% came into effect after a year-long investigation that has triggered an angry reaction from China. The US and Canada had already enforced 100% tariffs on Chinese EVs.
However, the EU is a divided house on this issue. While 10 EU members including France and Italy supported tariffs in a vote in October, five including Germany opposed them and 12 abstained.
Chinese automakers such as BYD and SAIC were told by the Ministry of Commerce that they should put the brakes on big asset investment plans such as factories in countries that supported the proposal, sources told Reuters.
Europe accounted for over 40% of EVs shipped from China in 2023.
A Chinese company has recently agreed to build a USD 1 billion plant in Spain to make machinery used in hydrogen production. Spain is one of the EU countries that abstained.
State-owned SAIC is finding a site for an EV factory in Europe. BYD is building a plant in Hungary, which voted against the tariffs.
The Chinese government told the automakers to avoid investment discussions with individual countries and instead work towards holding collective talks, the Reuters report says.
The EU says that Chinese subsidies hurt competitiveness at home. The European Commission argues that China’s spare production capacity is double the size of the EU markets.
EU trade chief Valdis Dombrovskis said last week that “by adopting these proportionate and targeted measures after a rigorous investigation, we’re standing up for fair market practices and for the European industrial base.”
Beijing has slammed the tariffs. “China does not agree with it and will not accept the ruling,” the Commerce Ministry said, adding that the country would take all necessary measures “to resolutely safeguard the legitimate rights and interests of Chinese companies.”
