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| The EU is about to increase taxes on Chinese electric cars. (Source: Getty Images) |
The European Commission (EC) plans to raise tariffs on electric cars imported from China this week.
The information was released in the context that car manufacturers in the old continent are facing fierce competition with cheap cars imported from the world's second largest economy .
The EU currently applies a 10% tariff on imported "made in China" electric cars.
Analysts predict the new tariffs will be in the range of 10-25%. Based on 2023 trade data, every 10% increase in tariffs over the current rate would cost Chinese EV importers in Europe about $1 billion more.
The decision to increase tariffs is a temporary measure while the EU continues its anti-subsidy investigation into electric vehicles from the Asian country, which is expected to last until October.
Once the results are in, the final tariffs will be applied, unless there is an objection from member countries.
Currently, electric cars produced in China imported into Europe are mainly from Western companies such as Tesla (USA), Dacia of Renault (France) and BMW (Germany).
However, the EC said that the market share of electric cars of Chinese brands in the EU has increased from less than 1% to 8%, and could reach 15% by 2025. The prices of these models are often 20% lower than European-made products.
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