On May 14, 2024, US President Joe Biden announced an increase or imposition of tariffs on Chinese-made goods valued at US$18 billion to protect American workers and businesses. These tariffs primarily target critical industries impacting the future economy and national security of the United States, with a notable tariff of up to 100% on electric vehicles (EVs).
Concurrently, the European Union's (EU's) anti-subsidy investigation into Chinese EVs, initiated last year, led to corresponding measures announced on June 12, 2024. By imposing punitive high tariffs on Chinese EVs, the US aims to pressure its allies, particularly those in the EU, to align their policies with US interests.
This report presents two major viewpoints on how China's excess EV production affects or will affect the global market, discusses China's short-, medium-, and long-term goals for EVs, explores measures by both the US and the EU to halt low-cost Chinese EV imports, and examines the impact of high US and EU tariffs on China's EV industry.
Table of Contents
1. Different interpretations of China's Excess EV Production Capacity
1.1 Viewpoint 1: Global Oversupply Due to China's Excess EV Production Capacity
1.2 Viewpoint 2: Growing Global EV Market Under Net-Zero Commitments
2. China's Accelerated Capacity Expansion Aims to Capture Global Market Share
2.1 Short-Term: China's EV Production Primarily for Domestic Consumption
2.2 Medium to Long-Term: China's Continuous Production Expansion May Lead to Global Supply-Demand Imbalance
3. Measures by the US and EU to Halt Low-Cost Chinese EV Imports
3.1 US
3.1.1 US Dramatically Increases EV Tariffs to 100%
3.1.2 Tariff Increases Serve Both Trade and Political Purposes Amid US Presidential Election
3.2 EU
3.2.1 Chinese EV Exports to Europe Not Considered Dumping but May Involve High Government Subsidies
3.2.2 High Tariffs Still Allow Profit Margins for Chinese Cars in Europe
4. Impact of High US and EU Tariffs on China-Made Electric vehicles
4.1 US
4.1.1 Minimal Imports of Chinese EVs to the US
4.1.2 Short-Term: Difficulty Finding Third-Country Production Sites for US-Bound Products Leads Chinese Carmakers to Southeast Asian Markets
4.1.3 Medium to Long-Term: Increased Tariffs on Lithium Batteries and Minerals Raise US-Made EV Costs
4.2 EU
4.2.1 Concerns of European Automakers Facing Retaliation
4.2.2 EU Tariffs Penalize Consumers’ Purchase of China-made EVs
4.2.3 Chinese Carmakers Expanding Production in Europe to Avoid Tariffs
4.2.4 Shift of Chinese Export Markets from Europe to Southeast Asia
List of Companies
List of Figures
Figure 1: Geographic Distribution of the Global Electric Vehicle Battery Supply Chain in 2023
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Audi
- BMW
- BYD
- CATL
- Chery Automobile
- EVE Energy
- Ford
- Geely Automobile
- Leapmotor Technology
- Mercedes-Benz
- NIO
- Nissan
- Polestar
- SAIC Motor
- Sunwoda Electronic
- Tesla
- Volkswagen
- Volvo
- Wuling Hongguang
- XPeng Motors
- Yunnan Energy
Methodology
Primary research with a holistic, cross-domain approach
The exhaustive primary research methods are central to the value that the analyst delivers. A combination of questionnaires and on-site visits to the major manufacturers provides a first view of the latest data and trends. Information is subsequently validated by interviews with the manufacturers' suppliers and customers, covering a holistic industry value chain. This process is backed up by a cross-domain team-based approach, creating an interlaced network across numerous interrelated components and system-level devices to ensure statistical integrity and provide in-depth insight.
Complementing primary research is a running database and secondary research of industry and market information. Dedicated research into the macro-environmental trends shaping the ICT industry also allows the analyst to forecast future development trends and generate foresight perspectives. With more than 20 years of experience and endeavors in research, the methods and methodologies include:
Method
- Component supplier interviews
- System supplier interviews
- User interviews
- Channel interviews
- IPO interviews
- Focus groups
- Consumer surveys
- Production databases
- Financial data
- Custom databases
Methodology
- Technology forecasting and assessment
- Product assessment and selection
- Product life cycles
- Added value analysis
- Market trends
- Scenario analysis
- Competitor analysis
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