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The arrival of electric vehicles from China is heading west with the aim of tapping the European and UK markets.
The 7,000 electric cars being transported on the giant BYD Explorer cargo ship could spark a wave of China’s global manufacturing dominance and spark a trade war.
The US has already imposed a 27.5% tariff on electric vehicle imports from China, and the EU is considering following suit.
Ursula von der Leyen told the European Parliament: “The global market is now flooded with cheap Chinese-made electric cars.”
BYD Explorer is transporting 7,000 electric vehicles to the West
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The ship is owned by BYD, a Chinese company and the world’s largest electric vehicle manufacturer.
The company sells basic model cars for just over £8,000. By comparison, Western rival Tesla, which once held the title of world’s biggest manufacturer, sells its cheapest model for just under £40,000.
BYD also moved ahead of Western countries in commissioning its own “roll-on-roll-off” (RoRo) vehicle transport aircraft, the first of its kind.
Typically, automakers use major international shipping companies to transport goods, but BYD was concerned about the demand being too high compared to intermodal options and decided to form its own transportation company.
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The ship is owned by BYD, a Chinese company and the world’s largest electric vehicle manufacturer.
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But moving the company closer to global dominance will require overcoming the EU’s internal politics.
Governments are concerned that their auto industry will be overshadowed by the influx of Chinese companies, which can compete with their own automakers on price and production speed.
Last year, Ms von der Leyen announced a formal inquiry into whether to tax imports.
The investigation examines whether BYD and two other major Chinese manufacturers, Geely Automobile and SAIC, are supported by “hidden” government subsidies, specifically cheap loans and supplies of steel and electricity. be done.
“Their prices are kept artificially low by huge state subsidies,” von der Leyen added. “This is distorting our market.”
Electric vehicles have come to represent the world’s determination to act more environmentally friendly and reduce the use of fossil fuels.
The UK and EU have set huge environmental targets and are aiming to eventually move to electric vehicles only.
Last year, Prime Minister von der Leyen announced a formal inquiry into whether to impose taxes on imported goods.
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Chancellor Rishi Sunak rolled back a number of net zero measures last year, including extending the deadline for banning the sale of new petrol and diesel cars and vans from 2030 to 2035.
This received mixed reactions from across the industry. While many manufacturers were disappointed by the announcement and its impact on EV adoption, motorists were pleased that new car prices were likely to drop.
Despite Mr Sunak’s push to go green, sales have not taken off, with only 16% of cars sold in the UK last year being fully electric.
Toyota’s chairman said last month that despite huge investments in EVs, electric vehicles will only have a 30% global market share.
He suggested that gasoline and diesel internal combustion engine vehicles, hybrid vehicles and hydrogen fuel cell vehicles will account for the remainder of the market.
Just 16% of cars sold in the UK last year were fully electric.
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To compensate for weak sales, many European countries are subsidizing the sale of electric cars, a measure that equally benefits both imported and exported cars.
Beijing dismissed the tariff threat as EU overreach and said its market share was still low.
China also dominates the production of materials needed to make cars. Europe could restrict sales of electric cars in the East, but it would have to pay China to get the resources needed to make them in the first place.
“That’s where China could potentially hurt Europe, which relies on these imports,” said Noah Barkin, a trade policy expert at the German Marshall Foundation.
The main problem facing China is that customers are likely to be reluctant to buy cars from unfamiliar brands such as BYD.
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