SHANGHAI – China has told its automakers to halt big investment in European countries that support extra tariffs on Chinese-built electric vehicles (EVs), two people briefed about the matter said, a move likely to further divide Europe.
The new European Union tariffs of up to 45.3 per cent came into effect on Oct 30 after a year-long anti-subsidy investigation into EV imports from China that divided the bloc and prompted retaliation from Beijing.
Ten EU members including France, Poland and Italy supported tariffs in a vote in October, in which five members including Germany opposed them and 12 abstained.
Chinese automakers including BYD, SAIC and Geely were told at a meeting held by the Ministry of Commerce on Oct 10 that they should pause their heavy-asset investment plans, such as for factories, in countries that backed the proposal, said the people.
Several foreign automakers also attended the meeting, where the participants were told to be prudent about their investments in countries that abstained from voting and were “encouraged” to invest in those that voted against the tariffs, the people said.
Geely declined to comment. SAIC, BYD and the Commerce Ministry did not immediately reply to requests for comment.
The move by the Chinese authorities to suspend some investment in Europe would suggest that the government, keen to avoid a sharp fall in EV exports to the key market, is seeking leverage in talks with the EU over an alternative to tariffs.
Europe accounted for more than 40 per cent of EVs shipped from China in 2023, according to Reuters’ calculations using data from the China Passenger Car Association.
Given the 100 per cent tariffs on Chinese-made EVs in the United States and Canada, a drop in EV exports to Europe would risk deepening overcapacity Chinese automakers face in their home