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In June, NewsVoice and other international journalists visited Guangzhou Automobile Group (GAC), a car factory in Xinjiang, China. GAC is a state-owned automobile manufacturer and the fifth-largest in China. Senior Manager Luo Haitian says the cars are mainly exported to Central Asian countries. Many are purely electric.
Bloomberg reported on July 30 that a record number of Chinese electric cars were sold in Europe in June. China took 11% of Europe’s electric car market last month, around 23,000 cars. Registrations set a new record, with twice as many EVs registered in Europe in June, a 72% jump from May.
There is a new battery factory in Kurla City in Xinjiang, and the new GAC factory near Urumqi, which has 200 employees, will start producing cars in 2025. Batteries are also produced in Guangzhou.
Senior manager Luo Haitian at the GAC factory in Xinjiang says the salaries for the workers are quite high. They will have a 1000 yuan subsidy per month if they buy a car from the factory and a 20% discount. They work 8 hours per day and with no shifts except when there is a high car demand.
New tariffs
June was generally very strong for electric cars rolling out on European roads, but in early July, the EU slapped punitive tariffs of up to 38% on Chinese electric cars.
From July 5, 2024, the EU’s punitive tariffs on imports of electric cars from China came into force. An additional customs duty of up to 38% will be imposed on imports into the EU, on top of the existing 10% duty on cars from China. Consequently, the total import duty will be as high as 48%.
The European Commission has disclosed that three Chinese manufacturers, BYD, Geely, and SAIC, will pay additional duties between 17% and 37%. SAIC owns the MG and Maxus brands, both of which are present in Europe.
Chinese cars are not so expensive
Chinese cars are much less expensive than European cars since the Chinese government financially supports Chinese car manufacturers.
Let’s give one example. The price of a Chinese Tank 300 starts at 28,000 USD in the US but only at 17,520 USD in China. The Tank 300 is similar to a Jeep Wrangler, which costs 38,500 USD. If the highest EU punitive tariffs hit the Tank 300, the price will start at 26,300 USD.
A trade war between the EU and China is now feared. In early July, the Chinese government threatened to increase import duties on European gasoline cars.
At the same time, several German manufacturers have production in China and deep partnerships with Chinese companies. SAIC and Volkswagen have a long-standing joint venture project.
If a car were directly imported from Xinjiang in China, it would take 45 days to ship to Europe. According to Luo Haitian, as of the end of June, no cars from the GAC factory had been sold to Europe.
Chinese E-Cars can easily make Europe more electric.
Sources and related
- NewsVoice
- Bloomberg: Chinese EVs Nab Record 11% Share in Europe Ahead of Tariffs
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