Stellantis CEO Voices Tariffs on Chinese EVs Are A ‘Major Trap’

Stellantis CEO Carlos Tavares has voiced public concerns regarding the potential economic impact that tariffs have on Chinese electric vehicles (EVs) stating them as a “major trap for the countries that go on that path” for the global EV market at the Reuters Events Automotive Europe conference in Munich. 

U.S. and E.U. Tariffs On Chinese EVs

Recently, the Biden administration announced a quadrupling of tariffs on Chinese EVs from 25% to 100% with a new start date of August 1. The reasoning behind the tariffs on Chinese EVs by the Biden administration derives from concerns over low-cost China’s EV exports soaring at a rapid pace against American interest and manufacturing. 

Moreover, the European Union (E.U.) has also been investigating China’s subsidies for domestic EV manufacturers. Through its investigation by the E.U.’s European Commission, it will reveal its decision on potential tariffs on June 5. 

Furthermore, as a response, China has teased retaliation regarding tariffs of their own up to 25% on imported vehicles according to Liu Bin, chief expert of China Automotive Technology & Research Center, who told Global Times. 

Tavares’ Statements On Tariffs

In regards to Tavares’ statements to Reuters, he highlighted the broader influences of the tariffs and the E.U.’s potential tariffs stating, “When you fight against the competition to absorb 30% of cost competitiveness edge in favor of the Chinese, there are social consequences. But the governments, the governments of Europe, they don’t want to face that reality right now.”

Notably, Tavares has partnered with Leapmotor to create a joint venture called ‘Leapmotor International’ to launch affordable Chinese EVs in the European market and other markets including South America, Asia, and the Middle East. With this in mind, Tavares further states, “We will try to be Chinese ourselves, which means instead of being purely defensive vis-à-vis the Chinese offensive, we want to be part of the Chinese offensive,” according to Reuters. 

Obstacles For Chinese EVs

As Chinese EV exports take under 60% of new EV sales in 2023 according to the International Energy Agency (IEA), the rest of the global EV market with the U.S. imposing tariffs and the E.U. possibly imposing tariffs could drive that number down. With Chinese automakers including BYD already established a firm presence in the European market, its motive to take away Tesla’s crown in the European market by 2030 could encounter additional obstacles.

With Tavares’ statements underlining the complexities of the global EV market and tariffs, the EV industry along with political entities, lawmakers, and Chinese automakers will have to navigate the substantial challenges that pose in front of them all.  

Want to learn more about EVs? Thinking of buying an EV? Head over to EV.com and discover more.