EU sees little chance of success in EV tariff talks with China

EU sees little chance of success in EV tariff talks with China

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By: bloomberg
, updated on: November 12, 2024, 10:00 am

  • The EU and China are discussing a solution to the EV tariff war.
The EU and China are discussing a solution to the EV tariff war. (AFP)

The EU is seeing very limited progress in talks with China aimed at finding an alternative to tariffs on electric vehicles, and the bloc sees little chance of a quick deal at the moment, according to people familiar with the matter.

China and the EU will continue technical talks this week after discussions in Beijing where both sides reported some progress.

However, the chances of a deal are slim at the moment, said the people, who spoke on condition of anonymity to discuss private talks. China has not yet moved toward strict EU requirements to ensure that any arrangement is enforceable and matches the impact of anti-subsidy tariffs adopted last month, the people said.

The two sides are exploring an agreement on so-called price undertakings – a complex mechanism to control prices and volumes of exports, which is used to avoid tariffs.

Recent talks have mostly focused on establishing a communication mechanism between Brussels and Beijing, as well as avoiding the risk of so-called cross-compensation, whereby any minimum import price on EVs is offset by hybrid cars and accessories such as are offset by sales of other goods. people said.

The two sides also remain at odds over the possibility of agreements with individual carmakers, including European companies that have joint ventures with Chinese companies. The EU argues that such deals would be consistent with World Trade Organization rules, while Beijing insists on negotiating an umbrella agreement led by a Chinese trade body.

China has threatened to respond to the EV tariffs with tariffs of its own on dairy, pork and brandy. The EU has said it will protect its interests in those cases while opposing linking the investigation to any kind of grand bargain.

Earlier this month, Beijing filed a request with the WTO to hold dispute consultations on EV tariffs. The EU adopted additional fixed tariffs of up to 35% last month and they will remain in place for the next five years without an alternative agreement.

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First publication date: 12 November 2024, 10:00 am IST

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Trump claims Chinese automakers are building factories in Mexico, promises 200% tariffs

Trump claims Chinese automakers are building factories in Mexico, promises 200% tariffs

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By: AP
, updated on: Sep 18, 2024, 08:57 am

Trump made false claims about Chinese auto factories in Mexico, threatening to impose heavy tariffs on vehicles. He warned that a Harris win would devastate the economy

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Donald Trump is not a fan of electric vehicles, nor is he interested in subsidies for these. He is running for President of the United States again and has expressed his views on EV subsidies on several occasions. (Reuters)

Former President Donald Trump on Tuesday repeated false claims that Chinese automakers are building huge factories in Mexico. During a stop in the automobile state of Michigan, he vowed to impose a 200 percent tariff on all vehicles built in these unbuilt plants and shipped to the United States.

Trump also claimed during an event in Flint that if Democratic Vice President Kamala Harris is elected in November, there will be no auto industry in the US because electric vehicle manufacturing will move to China.

The statement comes at a time when employment in the automobile sector has grown since President Joe Biden took office in January 2021, after declining during Trump's first term.

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“If I don't win, within two to three years you're going to have no auto industry,” Trump said, calling any growth under Biden and Harris temporary. “You're going to have no manufacturing plants. China is going to take them all over because of the electric car.”

He told the crowd that he would force foreign automakers to build factories in the U.S. by imposing tariffs on imported vehicles, saying it would be “like taking candy away from a baby.”

Foreign automakers already have several factories in the US, mostly in the southern states.

Auto jobs fell 0.8 percent during Trump’s tenure to a little over 949,000 in January 2021, when he left office, according to the Bureau of Labor Statistics. Since Biden took office that month, auto and parts jobs rose 13.6 percent in August to 1.07 million, so there’s no evidence the industry is disappearing. Auto sales rose 2.4 percent in the first half of this year.

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Trump said his tariffs would prevent Chinese vehicles made in Mexico from being sold in the United States, forcing automakers in China and elsewhere to set up factories in the United States.

“They're being owned and built by China in Mexico, and there are several being built there right now,” Trump said of the Chinese factories.

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Although some Chinese automakers aspire to sell in the U.S., industry analysts say no major Chinese-owned auto factories are under construction in Mexico, and only one small Chinese auto assembly factory is in operation there, run by a company called JAC that builds inexpensive vehicles from kits for sale in that country.

Trump also promised to impose tariffs on vehicles made in the U.S. if other countries impose taxes on vehicles made in the U.S. But tariffs often end up being levied on consumers in the country that assesses them.

The Harris campaign released a statement from Michigan Senator Gary Peters saying a second Trump term would kill auto jobs, “handing Michigan's global auto manufacturing leadership over to the Chinese government.” He said Harris has a plan to bring good-paying manufacturing jobs home “and ensure Michigan workers continue to lead the world in auto manufacturing.”

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First Publication Date: Sep 18, 2024, 08:57 AM IST

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Lotus slashes delivery targets due to tariffs on Chinese electric vehicles

Lotus slashes delivery targets due to tariffs on Chinese electric vehicles

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By: Bloomberg
, updated on: 01 September 2024, 08:17 am

Electric carmaker Lotus Technology Inc, owned by China's Geely, has slashed its annual delivery target by more than half because of the tariffs.

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Lotus Technology, the EV arm of the British sports car maker, has cut its annual delivery target by more than half amid increased tariffs on Chinese electric vehicles and weak demand. (Lotus)

Electric carmaker Lotus Technology Inc., majority-owned by China's Geely, has slashed its annual delivery target by more than half amid tariffs on Chinese-made electric vehicles and weak demand.

The company, which listed in February after being spun off as the EV arm of the British sports car maker, said on Wednesday it now expects to deliver 12,000 vehicles this year, down from a previous target of 26,000.

Shares in Lotus Technology fell 4.3 percent in early trade in New York, having lost nearly half of their value since listing.

Also read: Chinese EV makers suffer setback in Europe as tariffs begin

The lower target comes after the U.S. and the European Union planned to impose tariffs on EVs imported from China, where Lotus Technology is based and makes some models. The EU, which has accused China of unfairly subsidizing carmakers, has raised the prospect of imposing tariffs as manufacturers such as BYD Co. have begun to enter Europe more aggressively with cheaper EVs.

The outlook cut is a blow to investors who backed the company when it listed in February. At the time, Lotus said its range of luxury EV models and an alliance with luxury goods giant LVMH would help it avoid the same struggles as rivals.

Zhejiang Geely Holding Group, the automotive empire of billionaire Li Shufu, rescued Lotus in 2017 after the carmaker suffered as consumers turned to SUVs. The company is building electric models priced between $80,000 and $150,000, including more SUVs.

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The British sports car division is separate from the listed entity and is wholly owned by Geely.

Geely has faced similar problems with other brands it supports amid a broader slowdown in EV demand. Polestar has lost about 90 percent of its value since it was spun off from Volvo Car AB two years ago.

Geely also has stakes in Mercedes-Benz Group AG and Aston Martin Lagonda Global Holdings PLC.

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First Publication Date: 01 Sep 2024, 08:17 AM IST

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