Chinese EV manufacturers shift production to Europe in response to EU tariffs

Several Chinese electric vehicle (EV) manufacturers are moving production to Europe. This is in response to the European Union’s increased import tariffs on EVs made in China. The EU’s new tariffs, ranging from 17.0% to 36.3%, will add to the existing 10% import duty by the end of October. These increases will significantly impact the profitability of Chinese carmakers in Europe.

Major Chinese manufacturers like Geely, BYD, SAIC Motor, and Xpeng are acting to mitigate the financial hit. Geely, known for its Volvo, Polestar, and Zeekr models, explores production options in Europe. They received a relatively low tariff increase of 19.3%. BYD, China’s largest EV producer, announced in January plans to build a large factory in Hungary. SAIC Motor, facing the steepest tariff of 36.3%, also plans to shift production to Europe.

Other companies like Leapmotor and Chery are following suit. Leapmotor already partners with Stellantis to produce its T03 model in Poland. Chery, a lesser-known name in Europe, decided to build its first European factory in Barcelona.

This strategic move by Chinese EV manufacturers aims to safeguard their competitiveness in the lucrative European market amid the EU’s protective trade measures.