Chinese electric cars could dominate the European market, despite the trade sanctions introduced.
According to a report by the Polish Economic Institute (PIE), Chinese automotive giant BYD plans to export 75,000 electric vehicles per year to European Union countries, using its factory in Turkey. Thanks to the customs union between Turkey and the EU, the company can bypass the new tariffs imposed by the European Commission in July 2024.
The strategy adopted by Chinese manufacturers, known as "tariff jumping", involves launching production in EU countries or states that have preferential trade agreements with the Union in order to avoid EU customs tariffs. An example of this approach is BYD's investment in Hungary and the cooperation of the Chinese conglomerate Chery with the Spanish company Ebro in the production of electric cars.
In July 2024, BYD announced a $1 billion investment to build a factory in Turkey. The plant, located at a strategic point, is to produce 75,000 cars per year, intended for the European market. Turkey, being a member of the customs union with the EU, is attracting more and more foreign investment, ranking fourth in Europe in terms of the number of new investment projects, according to the EY Europe Attractiveness Survey 2023 report.
In July 2024, the European Commission imposed temporary tariffs on three Chinese companies, including BYD, ranging from 17.4% to 38.1%. The final decision on permanent tariffs is to be made in October, and the tariffs may come into force in November 2024. In the meantime, companies covered by the temporary tariffs must provide bank guarantees, and the final amounts will be collected after the permanent tariffs are approved.
Chinese companies, despite the obstacles, are looking for ways to circumvent European restrictions and strengthen their position in the electric car market in Europe.
