After nine months of wrangling, the EU officially imposed tariffs on Chinese electric vehicles from July 5, ranging from 17.4% to 37.6%.

This unpopular decision is bound to cause trouble for Chinese automakers. Currently, the three sampled Chinese enterprises - BYD, Geely Automobile, and SAIC Motor Corporation Limited - are respectively subject to anti-subsidy duties of 17.4%, 19.9%, and 37.6%.

Other Chinese vehicle manufacturers that have cooperated but have not been sampled will be subject to a 20.8% tariff, while those that have not cooperated will face a 37.6% tariff.

So, how is the EU's tariff on Chinese electric vehicles calculated? In the report issued by the EU, it claimed that it found that the Chinese government's subsidies for Chinese electric vehicles include low-interest loans, cheap land, and electric vehicle sales incentives. At the same time, it also provides battery subsidies, significantly reducing battery procurement costs. The EU believes that SAIC and Geely obtained battery products at "below-normal prices." Although BYD produces batteries on its own, it can also receive subsidies for battery materials.

Therefore, to ensure fair competition in the European market, the EU imposed tariffs on Chinese electric vehicles. According to Car2C's understanding, this is related to the total amount of subsidies estimated by the EU.

Taking SAIC as an example, the EU estimates its total subsidies at 34.4%. Among them, state-owned bank loans account for 1.38%, other financing accounts for 8.27%, subsidies account for 8.56%, electric vehicle sales incentives account for 2.28%, cheap land accounts for 0.67%, and low-cost batteries account for 13.24%.

The total subsidies for BYD and Geely in the same category are 15.1% and 19.72%, respectively.

After the implementation of the tariff increase, SAIC Motor Corporation Limited was the most affected. Compared to 2023 sales, SAIC's MG brand exported as many as 230,000 vehicles to the European market, accounting for about 70% of the total Chinese brand exports to Europe and 20% of SAIC's total exports. In contrast, BYD, Geely Automobile, and others have a small market share in Europe.

According to the sales figures of Chinese brands exported to multiple European countries in the first four months of this year released by Cui Dongshu, excluding Russia, SAIC Motor Corporation Limited has the highest sales in other European countries, reaching 81,000 vehicles, accounting for 25% of its total exports. This is why SAIC Motor Corporation Limited responded so strongly after being counter-sanctioned by the EU. On July 5, SAIC Motor Corporation Limited issued a statement stating that it would "officially request the European Commission to hold a hearing on the temporary anti-subsidy measures for Chinese electric vehicles and further exercise its right of defense in accordance with the law."

The outcome of the hearing is unknown, but if SAIC Motor Corporation Limited wants to continue exporting electric vehicles to Europe, it must accept the decision to impose tariffs. Other Chinese brands intending to enter the European market but not yet achieving local production will also need to accept this EU decision.