The launch of an electric car under 20,000 euros from the Chinese brand BYD on the European market threatens to mow the grass under the feet of local manufacturers.
Last month, BYD announced that it would introduce its Seagull small electric hatchback to the European market next year. The sales price would be less than 20,000 euros.
The CEO of the American electric car maker Tesla, Elon Musk, previously warned that BYD would “virtually destroy” other manufacturers without trade barriers. In the United States, President Joe Biden already responded by quadrupling import duties on Chinese e-cars.
The European Commission is also investigating the Chinese electric car industry for illegal government subsidies. This could lead to an increase in European import duties from July onwards.
No asking party
But the European manufacturers themselves are not in favor of such an intervention. The German manufacturers BMW and Volkswagen (including VW, Audi, Porsche and Skoda), among others, have already spoken out against it, as has the car company Stellantis (including Citroën, Peugeot and Fiat). “We don’t think protectionism will provide us with a long-term way out of this competition,” Stellantis CEO Carlos Tavares said last week.
European – and especially German – car makers are more dependent on the Chinese market than, for example, American players and are therefore exposed to possible Chinese retaliation. That this would follow became apparent on Wednesday: the Chinese Chamber of Commerce in the European Union said it was told by “insiders” that Beijing is preparing import duties of up to 25 percent on the import of both American and European cars.
In addition, BYD is building an electric car factory in Hungary and European CEO Michael Shu said earlier this month that the manufacturer would consider a second European production site in 2025. In this way, the effects of possible higher European import tariffs also weaken.