THE China Association of Automobile Manufacturers (CAAM) yesterday protested against the EU’s additional tariffs on China-made electric vehicles (EVs), saying their verdict was based on distorted information, the Global Times reported.

The high-profile decision came Tuesday, two months after the EU hiked tariffs on all electric cars imported from China, citing “unfair state subsidies” that unduly benefited the country’s electric vehicle makers at the expense of European manufacturers.

The European Commission began to impose temporary extra duties of 17.4% to 38.1% on imported Chinese electric cars July 4, while it carried out an investigation into the alleged subsidies.

Cars made by BYD — which is vying with Tesla to be the world’s biggest seller of battery EVs — are now subject to an additional duty rate of 17%. Geely, which owns Sweden’s Volvo, has been hit with an additional 19.3% tariff. And Tesla, which has a factory near Berlin but exports many of the cars it makes in China to Europe, has been slapped with a rate of 9%.

Companies “cooperating with the EU’s investigation” will face tariffs of 21.3%, while those “not cooperating” will be subject to 36.3% import duties.

The verdict raises a red flag on the risks and uncertainty posed by EU policies and undermines the confidence of Chinese firms operating and investing in Europe, cautioned CAAM. This will also have a negative impact on the healthy development of EU’s auto making industry as well as the local job market, it said.

After the initial EU tariffs took effect in July, Tesla hiked the price of its Model 3 in Europe by about 4%, or US$1,666, to US$42,177, blaming the additional duties.

Still, the Model 3 remains cheaper than the BYD Seal, according to George Whitcombe, an automotive research analyst at consultancy Rho Motion.

BYD, for its part, has not yet raised prices in Europe despite the hefty additional tariff.

The company could also ramp up exports of plug-in hybrid electric vehicles, which Tesla doesn’t make, as the tariffs apply only to battery EVs. And in future, BYD could shun tariffs by making cars in Turkey for the EU market, as imports from Turkey are not subject to tariffs.

Regardless of higher tariffs, Chinese EV makers are unlikely to give up on Europe, which accounted for more than a third of their exports last year, more than the next five largest markets combined, according to Citi. (SD-Agencies)