EU tariffs on Chinese-made electric cars will accelerate factory closures in Europe by local automakers as the tariffs push Chinese manufacturers to build facilities in Europe, adding to problems of overcapacity, the chief executive of Stellantis said on Monday ( (NYSE:STLA).
European governments, including Italy’s, are trying to woo Asian automakers as the companies boost their commercial presence in the region.
Manufacturing cars in Europe would allow them, under certain conditions, to avoid tariffs on electric cars imported by the European Union.
Tariffs are a “good communication tool” but they have side effects, Stellantis chief executive Carlos Tavares said at the Paris motor show.
“They increase the overcapacity of Europe’s manufacturing system. The way to avoid customs duties is to manufacture in Europe,” he added. “Accelerate the need to close factories.”
Speaking to Italian media, Tavares cited the case of Chinese EV giant BYD (SZ:002594), which is building the first European assembly plant in Hungary.
“Chinese automakers will not go to Germany, France or Italy to make their cars because they will have cost disadvantages there, starting with energy costs,” he said.
Rome, which is at loggerheads with Stellantis over production cuts in Italy, has said it is in talks with Asian automakers about possible manufacturing investments, including China’s Dongfeng and Chery Auto.
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Reference;
Reuters (2024) EU tariffs on Chinese EVs to accelerate plant closures in Europe, Tavares says By Reuters, Investing.com. Investing.com. Available at: https://www.investing.com/news/stock-market-news/eu-tariffs-on-chinese-evs-to-accelerate-plant-closures-in-europe-tavares-says-3661935 (Accessed: 14 October 2024).
