TMTPost -- Volvo Cars, one of the most well-known premium car brands based in Europe, is going to delay launch of EX30, its best selling electric vehicle (EV) model, in the United States due to the new additional tariffs on EV imports from China.
Credit：Volvo
EX30 was expected to hit the U.S. market by the end of this year, but Volvo will not deliver the model in the market until 2025 after the Biden administration sharply hiked a duty on Chinese EV imports. Volvo informed retailers and preorder holders that the EX30 will be delayed with a new 2025 target delivery date, citing “changes in the global automotive landscape.”
Bjorn Annwall, Volvo’s deputy chief executive officer and chief commercial officer, suggested the automaker will shift production of the U.S.-bound EX30 out of China, and could transfer the output to Belgium to avoid hit by the tariff. 2025 is the year in which Volvo is schedule to start producing EX30 cars at its facility in Belgium, Annwall said in an interview in Visby, Sweden earlier this week.
“We have decided to wait with the market introduction so that we can optimize our footprint, as there are new US tariffs and the European Union may also introduce tariffs,” he said. “Our U.S. customers who had hoped to receive the car this fall will unfortunately not get it delivered until next year.”
The White House announced last month that U.S. President Joe Biden directed his Trade Representative to raise tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. The direction leads to sharp increases in tariffs across strategic sectors such as semiconductors and impose new tariffs on cranes and medical products. The tariff rate on EVs under Section 301 will increase to 100%, quadrupling the current tariff of 25%.
The European Union followed suit. The European Commission said on June 12 that it has pre-disclosed the level of provisional countervailing duties it would impose on imports of battery electric vehicles (BEVs) from China, which would be introduced from July 4 if discussions with Chinese authorities do not result in an effective solution. The executive arm of the EU concluded through an anti-subsidy investigation that the BEV value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.
If the abovementioned duties are materialized, the European Commission would impose additional duties on three sampled Chinese EV makers, on top of the ordinary BEV import duty of 10%. The additional individual duties would be 17.4% for BYD, 20% for Geely and 38.1% for SAIC. According to the statement, other BEV producers in China, which cooperated in the investigation but have not been sampled, would be subject to the following weighted average duty: 21%, while all other BEV producers in China would face an extra duty of 38.1% if they did not cooperate in the investigation.
The EU may soften its stance following he ongoing talks with China amid threat of Beijing’s retaliation. China is promoting introduction of procedures related to tariff hike on gasoline cars with large displacement engine, more exactly, gasoline cars powered by engines larger than 2.5 liters, according to an article posted by Yuyuan Tantian, a social media influencer affiliated with state broadcaster China Central Television (CCTV), citing insiders of China’s auto industry following the EU’s additional tariff proposal. If China raises provisional tariff rate of the abovementioned vehicles, European brands such as BMW and Mercedes-Benz will be the first to be affected, which means that European automobile exports to China will suffer a blow, Yuyuan Tantian wrote.
China and the EU agreed to hold consultations on EVs after a meeting between Chinese Commerce Minister Wang Wentao and German Vice Chancellor Robert Habeck. China is willing to consider both parties' reasonable concerns to avoid the escalation of trade frictions in a rational and professional manner, Wang told Habeck, who travelled to China last weekend.
If the European side stubbornly insists its wrong way, China will take necessary measures, including lodging a case under the World Trade Organization (WTO) dispute settlement mechanism, to firmly defend its legitimate rights and interests, Wang cautioned.Habeck said the German government is deeply concerned about the EU's anti-subsidy investigation into Chinese EVs, which will negatively impact Europe's green transition and consumer interests, according to a statement of Chinese Commerce Ministry.
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