Chinese EV sales drop as EU tariffs take hold

THE effect of the European Union’s new import tariffs on Chinese-made electric vehicles has begun to show its impact on regional sales figures.

Sales of imported models, including those from BYD and MG, fell by up to 45 per cent last month (July) when compared with those in June, according to research agency Dataforce, which compiled results across the 16 member countries that have reported July sales figures to date.

Though the drop may have been exaggerated by OEMs rushing to get vehicles into dealerships before the levy’s July 5 introduction, Dataforce suggests it is merely a blip on the radar, saying sales of Chinese imports will eventually continue their steady rise.

From a standing start in 2019, Chinese electric vehicle importers have seen steady growth across most European markets, their share of sales in the bloc hitting 8.5 per cent last month, up from 7.4 per cent the year prior.

In Germany, Chinese brands comprised eight per cent of all vehicle registrations in July, down from 13 per cent in June, while French sales fell three per cent to five.

The report states that while EVs still represent just a small part of the entire European market, they are set to dominated over time as regulations push ICE cars out.

Looking at July alone, we note that BYD sold three times the number of EVs in Europe than it did a year earlier. MG, however, posted a 20 per cent drop in sales, while Polestar sales fell 42 per cent.

BYD’s future production facility in Hungary is likely to see sales growth continue – its European-made vehicles avoiding an importation tax of as high as 38.1 per cent on top of the EU’s standard 10 per cent import duty already in effect.

The European Commission’s import tariff aims to protect European manufacturers from what is describes as a “flood of cheaper imports”.

It comes just months after the United States announced similar plans, aiming to quadruple duties for Chinese-made EVs to 100 per cent on top of its existing 7.5 per cent important tax.

Europe’s Chinese EV levy will become permanent in November, barring a deal between Brussels and Beijing. The tariff debate has coincided with a global slowdown in EV uptake that has put pressure on OEMs not only in Europe and China, but across the globe.

In recent months, OEMs including Audi, BMW, Ford, General Motors, Mercedes-Benz, Stellantis, Tesla, Volkswagen and Volvo have made statements regarding lowering or delaying EV investments, a reduction in EV production forecasts, or on the reintroduction of older technologies, including range-extension or plug-in hybrid vehicles.