Research firm Rho Motion indicated at its Rho Motion Live Conference in Paris that the European Union’s anticipated tariffs on Chinese Electric Vehicles (EVs) might not significantly affect manufacturers’ profitability. According to Rho Motion’s head of automotive research, Chinese EV makers could potentially absorb tariffs of up to 30% and still maintain a profitability rate similar to their domestic market.
EU leaders are expected to announce an increase in tariffs from the current 10% to somewhere between 25-50% on Chinese EVs following the upcoming elections. This move mirrors the recent decision by the United States to impose a 100% tariff on Chinese EVs, which many experts believe will have little impact on the market due to the relatively low import volume from China.
As EU leaders weigh their decision on tariff levels, they are mindful that a 30% tariff may not significantly affect the profitability of key manufacturers. However, escalating tariffs could lead to a trade war, which would be detrimental to a region still heavily reliant on Chinese-dominated supply chains to meet ambitious climate goals.
Will Roberts, Head of Automotive Research at Rho Motion, highlighted these concerns, stating, “If provoked, the reaction and repercussions could lead to a trade war which would be devastating for a region that is still heavily dependent on Chinese dominated supply chains in order to achieve its lofty climate goals.”
The Rho Motion Live Conference, attended by industry leaders from the world of electric vehicles and associated value chains, delved into various aspects of the electric vehicle value chain, including charging infrastructure, battery technologies, battery recycling, and raw material sourcing.
