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China, EU agree to end EV tariff disputes with minimum price pledge | Automotive News
(www.autonews.com)
this post was submitted on 27 Sep 2024
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Hmm.
That's an interesting set of rules.
So, it'll presumably let European auto manufacturers compete in the value segment, whereas before they couldn't put a car out at as low a price.
But...if Chinese manufacturers continue to have lower costs -- I remember a quote from BYD saying that they were confident that they could maintain 15% lower costs -- it'll mean that they'll be able to offer a more-luxurious car in that segment and still make the same amount of profit.
So it may be that Chinese cars will wind up becoming associated with more-luxurious offerings in Europe.
It'd be kind of an interesting switch-up; my understanding is that historically European offerings were considered more-luxurious in China, and Chinese products could only really compete in the value segment.
EDIT: No, sorry, the 15% was apparently Tesla. I see articles with 25% to Europe:
https://technode.com/2023/09/06/byds-manufacturing-costs-in-eu-could-be-25-lower-than-rivals-ubs/
Same idea, though. You'd expect the cost difference to be expressed in terms of the output.
So what the EU is doing is, it won't allow the Chinese manufacturer to pass these cost reductions down to me as a consumer and force it to charge a "minimum price" instead, am I reading this right?
Not exactly. The chinese state is subsidising their car export prices - which is what the EU has a problem with.
Ah yes, the "benefits" of an authoritarian state: they can redirect public funds to undercut any competition?
Yeah, not just redirecting funds, they can also use forced labour to lower their production costs.
Also zero environmental protection.
That's my understanding of the article text, though obviously there's not a lot of detail there.
I assume that there'll be more analysis of it once the thing becomes public.
EDIT: It might also benefit internal combustion vehicle manufacturers, if it makes EVs less-competitive with them, at least until there's a hard cutoff and requirement to transition to EVs.
There is a hard cut off in 2035 and emission laws pretty much force a share of EVs. Starting next year that will be about 37%.
However a lot can make a car better, which has nothing to do with the drive train. Old car makers certainly can play that game.