In recent years, new energy vehicles have quietly replaced real estate and become the largest pillar industry in China's macro narrative, quite impressive.

Automobiles are the epitome of the industrial era, with strong driving force in upstream and downstream industrial chains, and also concentratedly reflect the manufacturing level of an economy. After the rise of China's neighboring countries Japan and South Korea, Japanese and Korean car brands have both secured a share in the international market, currently ranking first and third globally.

After China's reform and opening up, it has been working hard to develop the automotive industry and nurturing it during its infancy and growth period, such as requiring foreign-funded enterprises to jointly operate with Chinese enterprises in China to manufacture cars.

However, after more than three decades, despite rising production and sales, Chinese domestic brands have always been weak, and it is still Volkswagen, Mercedes-Benz, BMW, Toyota, and Honda that have been sold in China for a time.

For a long time, the automotive industry has often been cited by the Chinese as a negative example of industrial development. Especially after China's high-speed rail quickly created its own brand and benefits by learning from foreign technology, it has further highlighted the shortcomings of Chinese automakers.

01

Excellent but being beaten? NO!

In the past decade, the new energy vehicle revolution has brought a turning point, and China almost immediately seized the opportunity and firmly introduced generous industrial "big packages": capital investment, car purchase subsidies, and even electric vehicle licenses that require no lottery or restrictions. Of course, the main reason is still the competition between enterprises and the passion and vitality of entrepreneurship.

After the pandemic, the world suddenly realized that the development level of China's electric vehicles has been astonishing, and Western countries' fears became a reality: being surpassed by China in this industrial revolution is a highly probable event.

According to the IEA's "Global EV Outlook" annual report, China's electric vehicle sales exceeded 8 million last year, accounting for about 60% of the global total.

For China, even more importantly, almost the entire process of the rise of the electric vehicle industry occurred after the official announcement of "Made in China 2025" in 2015.

In the blink of an eye, ten years have passed. "Made in China 2025" involves ten industries, and among them, new energy vehicles are the most eye-catching, with their rapid rise, high technological content, and strong economic benefits, rarely rivaled by the other nine industries.

But the top-level designers in 2014 probably never imagined that new energy vehicles would develop so quickly in ten years, nor did they expect that the Western world's fragile ego would become so sensitive that the most beloved "child," electric vehicles, would be hit by the United States and the EU successively during the summer and autumn transition of its tenth birthday.

02

Brain concussion or buttock pain?

With the announcement, the EU has imposed temporary anti-subsidy tariffs on Chinese-made pure electric vehicles, effective from July 4th.

The tariff rates are not "one size fits all," mainly divided into three scenarios:

For the three sampled companies, the additional tariff rates are: BYD, 17.4%; Geely Automobile, 20%; SAIC Motor, 38.1%, combined with the original 10% tariff.

For other companies that have not been sampled but cooperated in the investigation, the tariff rate is uniformly 21%, such as Chery Automobile; for companies that did not cooperate, the additional tariff rate is uniformly 38.1%.

This means that among Chinese automakers, BYD faces a minimum tax rate of 27.4%;

As a state-owned enterprise, SAIC Motor can be imagined to cooperate less actively. And the "disobedient" child also received the heaviest punishment, "happily" receiving the maximum tax rate of 48.1%.

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