China has responded to a growing number of tariffs and legislation thwarting exports of its electric vehicles, saying it will stem the tide to foreign showrooms.
The Chinese government has said it will “rein in expansion” of its booming electric-vehicle industry, saying there is not enough “external demand” beyond domestic China.
The Financial Times reports China’s vice-minister of industry and information technology (MIIT), Xin Guobin, as saying the government will take “forceful measures” to address “blind” establishment of new electric-vehicle projects “by some local authorities and enterprises.”
It is being viewed as an acknowledgement of growing concerns in Europe and the US about the rapid rise of Chinese-made electric cars.
The European Union has launched a probe into the low prices of Chinese electric cars in Europe, which it alleges are “kept artificially low by huge state subsidies”.
China is dominating global electric-vehicle production, and has become the world’s number-one exporter of new cars of all types, overtaking Japan.
Analysts say the move to reduce exports could help rival car-making nations close the gap to Chinese manufacturers, with research by Forbes suggesting European car makers are five years behind the progress made by Chinese brands when it comes to electric cars.
In Western export markets, Chinese cars have been threatened with tariffs and new legislation amidst fears the global electric vehicle supply chain will become over-reliant on Chinese factories.
Governments in European Union nations and the United States have taken measures to help their own electric vehicle industries – and to counter the rapidly-advancing dominance of Chinese car makers and battery suppliers.
This has included the Biden administration extending 2022 tariffs on Chinese-made electric vehicles to include US-made cars that use China-sourced battery packs from January 2024.
The measures were introduced to aid the US electric-vehicle industry – while thwarting Chinese ambitions – and encourage steps such as the construction of a battery plant in Detroit by a company owned by Australian mining group Fortescue.
British publication The Daily Telegraph has reported that the UK’s department for energy security and net-zero has “commissioned the think-tank RUSI [Royal United Services Institute] to investigate whether over-reliance on [batteries and solar panels from] China amounts to a security risk.”
Similarly, European Union (EU) regulators have pointed to perceived advantages Chinese companies enjoy – including easier access to finance – as serving up a non-level playfield in comparison to its car makers.
The EU Commission sees China as a potential threat to the French, German and Italian car industries, and cites similar scenarios having played out in the aluminium and solar panel sectors that China now dominates.
While the latest move is seen by Yahoo finance senior reporter Ines Ferré as an ‘olive branch’ from China to increase electric-car competition globally, China also criticised such ‘protectionist’ behaviour from foreign governments.
Record sales of electric vehicles have been forecast for 2024, with the 10.46 million sold in 2023 expected to rise to 12 million – triple the number sold in 2020.
More than half of these are expected to come from China.
In the final three months of 2023, Chinese brand BYD became the world’s top-selling electric-car maker, outselling US specialist Tesla for the first time in battery-electric vehicle sales.
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