Stellantis CEO Carlos Tavares criticized the Biden Administration’s new tariffs on Chinese electric vehicle (EV) imports, warning that the measures would lead to increased inflation.
“Protectionism has a lot of drawbacks. They don’t appear immediately; they appear one after the other,” Tavares said, highlighting his concerns about the long-term effects of the tariffs.
Earlier this week, the Biden Administration implemented new tariffs on Chinese EVs and other products, with the largest increases targeting Chinese electric vehicles, which saw over a 100% rise. The administration is also considering penalties on Chinese EV automakers moving production to Mexico.
While the U.S. takes a stronger stance against Chinese EVs to protect local companies, Europe is still deliberating the potential consequences of imposing tariffs on Chinese EVs. European car manufacturers are struggling to compete with the lower prices of Chinese-made EVs.
The EU Commission has initiated an anti-subsidy investigation into Chinese EVs and their impact on the European market. Europe is considering higher tariffs on Chinese EVs, but according to the Rhodium Group, tariffs would need to exceed 50% to significantly affect the current market and give European automakers a competitive edge.
Stellantis is approaching the competition differently by partnering with Chinese automaker Leapmotor. This week, Stellantis and Leapmotor announced plans to launch a sub-€20,000 electric hatchback in Europe. The affordable EV is expected to be available in at least nine European countries by September 2024.
“Whether I like it or not, they are grabbing share. What I can do is leverage that dynamic,” Tavares said, as reported by The Guardian.
