SAIC Motor, Hit with Highest EU Tariff Rate on Chinese EV Exports, Requests Hearing to Explain Its Case

·         The Shanghai-based carmaker said the European Commission overlooked some information and counterarguments it submitted during the anti-subsidy investigation


[ABS News Service/05.07.2024]

SAIC Motor, which faces a 37.6 per cent tariff on exports of its electric cars to Europe, has requested a hearing from the European Union (EU) after the punitive measure came into effect on Thursday (4 July, 2024).

The Shanghai-based carmaker, which was slapped with the highest tariff rate by the EU, said in a statement on Friday that the European Commission overlooked some of the information and counterarguments it submitted during the anti-subsidy investigation.

“SAIC Motor will formally request the European Commission to hold a hearing on the temporary countervailing duties imposed on Chinese-made electric vehicles (EVs) to further exercise its rights of defence,” the company said in a statement on Friday. “The organisation committed errors in determining subsidies.”

It added that some incentives granted to domestic consumers by mainland Chinese authorities had been mistakenly counted as subsidies to spur EV exports.

Additional duties ranging from 17.4 per cent to 37.6 per cent were imposed on made-in-China electric cars bound for the EU starting Thursday, as the bloc described them as underpriced products with state subsidies that infringed upon the interests of European competitors.

State-owned SAIC, the Chinese partner of Volkswagen and General Motors, shipped 83,000 electric cars, including pure electric and plug-in hybrid vehicles, to Europe last year under the MG and Maxus badges.

The mainland’s largest carmaker became the owner of the MG brand after it acquired Nanjing Auto in 2007, which had paid US$105 million to buy the failed British carmaker two years earlier.

Last September, SAIC issued a bullish forecast for its overseas sales in 2024, expecting to sell 1 million MG cars abroad in 2024, with 30 per cent of those powered by batteries.

It also placed orders with shipbuilders for 12 large vessels to handle its export capacity.

“Europe, as a key growth driver, is important to SAIC as it dodges cutthroat competition at home,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “The company needs to double its efforts to [secure] at least a lower [tariff] rate to facilitate its exports.”

Technically, the tariffs on SAIC also apply to the VW and GM pure EVs assembled in China, even if they are only for the Chinese market.

In September, SAIC held its first dealer conference outside mainland China, which drew more than 200 dealers from six countries to London.

The duties provisionally came into effect this month, but the EU and China can still negotiate an agreement to solve the issue. A final decision will be made in November after consultations between EU members and Chinese EV makers.

Moody’s Ratings said in a report last month that the initial economic impact of the tariffs would be small for both China and the EU, as pure EVs make up just 1 per cent of all Chinese auto exports, or less than 50,000 units.

Bloomberg reported on Saturday that Turkey will soon unveil an agreement with BYD, the world’s largest EV maker, to construct a US$1 billion plant in the west of the country, a move likely to boost the Chinese company’s presence in Europe.

The new factory would improve BYD’s access to the European Union, because Turkey has a customs-union agreement with the bloc.

BYD, backed by Warren Buffett’s Berkshire Hathaway, is subject to a 17.4 per cent additional duty for exporting its pure EVs to Europe.