China's EV Boom Sparks Trade Tensions with US and EU

The United States and the European Union fear the Chinese electric vehicle competition, the founder and CEO of China's EV manufacturing giant BYD said on Friday. 

"There are many examples of politicians in other countries who are worried about EVs in China," BYD founder, CEO, and chairman Wang Chuanfu said at an industry event in China, as carried by Bloomberg.

The Chinese billionaire said that the idea to slap tariffs on Chinese EVs shows that China's electric vehicle industry is strong. 

"If you are not strong enough, they will not be afraid of you," Wang said in a speech at the event.  

While U.S. and European automakers struggle with weaker demand for electric vehicles, China is churning out a growing number of small and cheap EVs that are taking over the domestic car market and other markets in Asia.

The EU launched in October 2023 anti-subsidy investigations into EU imports of EVs from China to determine whether the value chains in China benefit from illegal subsidies.

The findings of the investigation will establish whether it is in the EU's interest to impose anti-subsidy duties on EV imports from China, the European Commission said at the time. The EU probe into the Chinese subsidies is set to conclude by November, but the bloc could impose tariffs as early as July.

Rumors are circulating that the EU could impose a 20% tariff.  

China, for its part, has threatened a 25% car tariff on EU and U.S. vehicles with big engines, which will hit higher-end European brands such as Mercedes-Benz and BMW the most.

Sales of China-made electric cars in Europe went up by 23% over the first four months of the year despite efforts by EU authorities to set up barriers for these imports in a bid to protect local manufacturers.

Some 119,300 electric cars manufactured in China were registered in Western Europe, including the UK, between January and April this year, the Financial Times reported earlier this week, citing data compiled by Schmidt Automotive Research. Over half of these, or 54%, were vehicles of Western European brands as well as Teslas and Japanese-brand EVs. The rest were Chinese EV brands.   

By Michael Kern for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Price Outlook More Bullish Than Selloff Suggests: Fund Manager
• Hopes of Fed Cut Jolts Oil Prices
• Oil Spill Shuts Down Dock at Europe's Second-Largest Port