China’s largest state-owned carmaker and the private sector’s biggest assembler, both at the top of the European Union’s electric vehicle (EV) tariffs list, denied they sought separate deals to avert the import levies.
SAIC Motor, the biggest state-owned carmaker and the partner of General Motors and Volkswagen, said it was “deeply involved” in the collective bargaining by China’s carmakers.
“There has never been a proposed deal for SAIC alone during the communications and negotiations with the European [trade bloc]”, which slapped a 35.3-per cent import tariff on it last month, SAIC said. The Shanghai carmaker, which shipped 83,000 EVs to Europe last year bearing the MG and Maxus badges, had sought to “explain its case” to the EU, according to its statement in July.
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Geely Automobile Holdings, the biggest of China’s private-sector assemblers and the owner of such brands as Volvo, Lotus and Zeekr, said any suggestion it negotiated separately with the EU was “slanderous”.
“Geely unswervingly supports the efforts to strike a collective deal with the EU,” the Hangzhou-based company said on Thursday.
The two denials followed Monday’s statement by the Ministry of Commerce, which reiterated that the state-backed industry guild the China Chamber of Commerce for Import and Export of Machinery and Electronic Products was the sole representative authorised to engage with the EU on tariff. Any separate discussions would “undermine trust” and harm the “continued efforts to resolve the issue,” the ministry said.
The war of words underscores how the different assemblers in China’s automotive industry are scrambling to respond to the EU’s levies, as they seek to preserve a fast-growing exports market amid a brutal discount war at home.
“The negotiations are more than commercial talks,” said David Zhang, general secretary of the International Intelligent Vehicle Engineering Association. “The EU tariff issue is likely to trigger escalated trade frictions between the two large economies. There will be drawn-out negotiations and there are still lots of uncertainties.”
In October, the EU voted to impose tariffs on Chinese-built pure-electric cars following an anti-subsidy investigation that began in September last year. The new duties are on top of the standard 10 per cent tariff applied to pure-electric cars made in China. The tariffs will be in effect for five years.
SAIC faces the highest rate of 35.3 per cent while Geely is subject to additional tariff of 18.8 per cent.
The European Commission “overlooked” some of the information and counterarguments it submitted during the anti-subsidy investigation, SAIC said in July. Some incentives granted to domestic consumers by mainland Chinese authorities had been mistakenly counted as subsidies to spur EV exports, the carmaker said, adding that it would appeal to European courts.
BYD, the world’s largest EV builder, will be issued an additional tariff of 17 per cent if it ships Chinese-made pure electric cars to the EU. Tesla’s cars assembled at its Gigafactory in Shanghai are subject to a lower duty of 7.8 per cent. Other Chinese carmakers will have to incur a 20.7 per cent rate.
The EU’s vote to slap tariffs on EV imports was carried last month 10 to 5, with 12 abstentions that effectively counted as votes in favour. Five countries – Germany, Hungary, Malta, Slovenia and Slovakia – voted against imposing tariffs.
China’s government has instructed the nation’s carmakers to refrain from additional investments in the EU countries that voted for the tariffs.
On October 10, Mofcom summoned major automotive firms including BYD and Geely. The ministry warned those assembled about the risks of setting up factories in countries like France and Italy, Reuters reported, citing people familiar with the matter.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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