Expert comments on EU imposing more tariffs on Chinese-made EVs

This week, the European Union (EU) announced it would be imposing more tariffs of up to 38 per cent on electric vehicles made in China, in order to create a more equal marketplace for automobile makers.

Professor ManMohan Sodhi explained the situation.

"Western countries are in a tight situation regarding electric cars. On the one hand, they seek high adoption of electric vehicles by consumers to meet their stated goals for 2030 and beyond. High prices of electric vehicles are a barrier despite attempts at subsidies, so in that sense, EVs made in China that are far cheaper than those made in the West should be very welcome to Western consumers. Also, the governments can divert the money from subsidies towards charging infrastructure, the other bugaboo that Western consumers have.

"On the other hand, with their low-priced vehicles, Chinese manufacturers threaten the auto industry in the West, and, in light of the geopolitics between the US and China, Western governments are reacting with protectionist measures by way of tariffs, sustainability goals be damned.”

Experts have disagreed with the EU’s approach to increase tariffs, citing that if the EU aimed to achieve its plan of banning the sale of new internal combustion engine vehicles by 2035, they needed to focus more on drivers, not automakers.

Professor Sodhi added:

"Still, the European countries are taking a middle-path approach and have not raised tariffs all the way to 100%, as President Biden announced in the US. Their relatively lower tariffs suggest sustainability still has some value compared to protecting the domestic industry and that their view on geopolitics is more tempered than the US.

"Overall, protectionist measures can only lead to higher car prices for the consumer and, in this case, also kick the can of achieving announced emission goals further into the long grass."

Professor Sodhi’s comments and other expert views on the situation can be found in the New York Times.