China "bypasses" EU tariffs - Increases exports of hybrid cars to avoid bloc obstacles
Major Chinese electric vehicle makers may have found a way to sidestep increased EU tariffs on electric cars while continuing to expand their share of the European market.
Companies such as state-owned BYD, Geely and SAIC have increased their hybrid exports to the EU, largely because these are not subject to tariffs. Hybrid cars use electric batteries and internal combustion engines. Other Chinese carmakers have also moved their assembly and production facilities to the mainland to further reduce the cost and impact of tariffs.
Chinese hybrid vehicles are expected to provide stiff competition to both Japanese and European models, with companies such as Toyota, Honda, Nissan and German brand Volkswagen experiencing declining sales in part because of this.
China exported 65,800 hybrid cars to Europe from July to October this year, according to the China Passenger Car Association (CPCA). This was over three times the number exported in the same period last year.
The European Union recently imposed high tariffs on Chinese electric vehicle manufacturers, amid accusations that the Chinese government subsidizes these manufacturers, allowing them to sell their products at deep discounts in the European market. BYD has been hit with a 17% tariff, SAIC with 35.3% and Geely with a rate of 18.8%.
Although this strategy of avoiding tariffs by focusing more on hybrid vehicles may work in the short term, it could also lead to new EU tariffs against Chinese hybrid cars, especially if the impact on domestic European manufacturers is large. .
Chinese hybrid models offer a greater range of features as well as sleeker, more modern designs, gaining European attention. In addition, Chinese manufacturers have significantly improved their reliability and quality, as well as safety ratings.
Hybrids are often cheaper than fully electric cars, while offering the convenience of a traditional engine during the sector's transition period. In some countries, these vehicles also benefit from tax breaks.
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