TE：2024年電車出海歐洲是否應該提高關稅歐洲如何將關稅作為工業戰略的一部分（英文版）（21頁）.pdf

《TE：2024年電車出海歐洲是否應該提高關稅歐洲如何將關稅作為工業戰略的一部分（英文版）（21頁）.pdf》由會員分享，可在線閱讀，更多相關《TE：2024年電車出海歐洲是否應該提高關稅歐洲如何將關稅作為工業戰略的一部分（英文版）（21頁）.pdf（21頁珍藏版）》請在三個皮匠報告上搜索。

1、To raise or not to raiseHowEuropecanusetariffsaspartofanindustrialstrategyMarch2024SummaryThe sales of battery electric cars in Europe have been growing quickly,with 2mlncarssoldacrossEurope in 2023 alone.But given Chinas edge in battery technology and some feet dragging byEuropean legacy carmakers,

2、more and more of those electric cars are imported from China.TheEuropean Commission launched an anti-subsidy investigation into Chinese EVs.With thepreliminary ruling expected soon,T&EspaperislookingattheEVimportsintoEuropeandwhataneffectiveresponseonbothEVsandbatteriesmightbe.This paper is part of

3、our work on industrial and trade policy.Europes goal should be todecarbonise as fastaspossiblebuttodosoinawaythatsafeguardsessentialeconomic,socialandsecurity interests.Decarbonisation in the EU shouldnotmeandeindustrialisation,andtradepolicyhasakeyroletoplay.19.5%of all electric carssoldacrosstheEU

4、lastyear,or300,000units,werebuiltinChina.InFranceand Spain close to every third BEV sold in 2023 was made in China.More than half of those comefrom Western carmakers:28%of all China made EVs were imported by Tesla,with RenaultsDaciaaddingafurther20%.ButtheChinesehomegrownbrandsarequicklycatchingup:f

5、rom0.4%oftheEV market in 2019 to 7.9%in 2023.T&EprojectsthelikesofBYD,MGandotherscouldreach20%oftheBEVmarketby2027.A briefingby1Figure:ShareoftheEUBEVmarketimportedfromChinaThis shows the challenge Europe is facing.Raising the tariffs to at least 25%(from 10%today)would match the tariffthe US origin

6、ally imposed.Based on the currentaveragevehicleprices,itisexpected to make medium cars(both sedans andSUVs)importedfromChinamoreexpensivethanEU equivalents,while compact SUVsandlargercarswillremainslightlycheaper.Itwouldalsoraisebetween 3-6 bln in additional annual revenue,mostofitfortheEUgeneralbud

7、getthatshouldbereinvested into scaling local clean tech supply chains.The UK should follow suit and adjustupwards its EV importtariffs,whileagreeingaEuropeanbatteryalliancewiththeEUforatariff-freeEVsupplychain.Tariffs will not stop Chinese companies from building factories in Europe as BYD and CATL

8、arealready doing.Nor should governments aim be to shield legacy carmakers from meaningfulcompetitionorleadtoashrinkingofferofaffordableBEVsforEuropeanconsumers.Theaimshouldbe to localise EV supply chains in Europe while accelerating the EV push,in order to bring the fulleconomic and climate benefits

9、 of the transition.It is therefore critical that a higher tariffisaccompanied by a regulatory push to ramp up the mass market BEV plans,including in thecorporatechannel,focusingonsustainableandmoreaffordableofferings.But Europe should not stop at EVs.Trade policyshouldbecomeanintegralpartofamorestra

10、tegicgreen industrial strategy.Lithium-ion batteries are at the heart of this:more than EUR 180 blnhasbeen investedintotheEUbatteryvaluechain,predominantlygigafactories,todate.Billionsofstateaid have been committed to projects such as Northvolt in Germany and Verkor in France.As aA briefingby2result

11、,Europe is expected to supply two-thirds of the demand locally this year and,potentially,couldbecomeself-sufficientfrom2026onwards.But executing this wont be easy:China manufactures over three-quarters of global capacity withprices at least 20%lower than in Europe(though it is rumoured thatChinesebr

12、andsgettheircellsat much higher discounts).Chinese companies are ahead of Europe on technology and supplychain preparedness.The gap with the US is smaller but made-in-America cells benefit from$45/kWhIRAsubsidies.At the same time,the EU battery cell import tariffis the lowest compared to China(10%fo

13、rEU)orthe US(10.9%for China),at a mere 1.3%currently.Without decisive protective and supportivemeasures,the EUbatteryindustryriskslosingouttoforeigncompetition.Therefore,ifitisEuropesgoal to have significant battery manufacturing in Europe it will need to introduce measures tocreateapulltomanufactur

14、elocally.Suchmeasurescaninclude:-Strongbatterysustainabilityrequirementsthatrewardlocalcleanandcircularmanufacturing.But the carbon footprint methodology being currently developed underthenewEUBatteryRegulationisnotsufficientandlacksstrictCO2thresholds.-Strong“Made in EU”requirements.But the current

15、 40%target in the Net Zero Industry Actlacksteeth.Thisleavestariffs.Highertariffscanbedoneinawaythatdoesnotcauseatradewar.ManyChineseplayers are already planning battery investments into Europe.Similar to previous trade disputes,an amicable solution can befound.Thiscanincludealowertariffuptoacertain

16、volumeofimports(e.g.10-15%ofthemarket)atanagreedminimumprice,withthehighertariffkickingina?erwards.To create a pull for local battery cell manufacturing,Europe would need to increase tariffs to atleast 20%by 2027 to close the average cost gap with China(likely more,something theinvestigation should

17、look into).Unlike solar,Europe should act preemptively before it is too late.This should be accompanied by stronger“Made in EU”requirements in public tenders,subsidiesandEUgrantsandloansgiventoEVandbatterymakers.A briefingby3Figure:exampletariffproposalThere is a real risk thatautomotivejobsandknow-

18、howwillleavethecontinentasEuropeanlegacycarmakers have been slow to transition to electric.The aim of Europestradepolicygoingforwardshould be to secure local manufacturing,ie“made in Europe”,nottoshieldincumbentcompaniesfrom competition.Trade protection can give legacy manufacturers some reprieve,bu

19、t ultimatelywhether they succeed or fail will depend on their business strategies and ability to compete withnew entrants,both Chinese and American.Going faster,not slowing down,is the only waytofendoffforeignimportsintoEurope.A briefingby41.IntroductionThe EU and the UK have put inplacepoliciestopr

20、ogressivelyincreasethesalesofzeroemissionvehicles(ZEV),largely battery electric(BEV)inordertophase-outcombustionenginesfromnewcarandvansalesby 2035.ThisisnecessarytoslashCO2emissionsfromlight-dutyvehiclestozero,oneofthesinglelargestsources of carbon in western economies.Such policies also create cer

21、tainty around the BEV market inEurope and send a strong investment signal,prompting dozens of billions worth of investment into EVproductionfacilitiesandbatterygigafactoriesalready.However,given Chinas technological edge in battery electric vehicle technology on the one hand,andslower transition by

22、European legacy carmakers on the other,the imports of Chinese made electricvehicles have been surging in recent years.This poses risks totheEUautomotiveindustrialfabricevenifitdoesbringabetterandmoreaffordableoffertoEuropeandrivers.Chinas ascent in electric vehicles is atleastpartiallyattributableto

23、generousgovernmentsubsidiesinallmanner of areas:tax reductions on vehicles and battery production,subsidies to lower energy and landacquisition costs,aswellasanaggressivepolicytosecurebatterymetalsabroad.ThisisasimilarstrategyChina has applied in other sectors,e.g.solar.To avoid what happened with t

24、he solar industry,theEuropeanCommissionhaslaunchedananti-subsidyinvestigationintoChineseEVsinSeptember2023.This paper looks into Chinese EV imports in Europe and analyses the likely dynamics and impacts ofhigher EV import tariffs.It considers the possible additional revenue from such tariffs,as well

25、 as looksinto extending these beyond electric cars only.Ultimately,T&E presentsthepolicyrecommendationsforthe European Commission as they deliberate ahead of the preliminary investigation results expected inearlysummer2024.2.ChineseelectriccarimportsintoEuropeA?er a steep x5 increase in the sales of

26、 electriccarsbetween2019and2021,drivenbytheentryintoforce of the EU 2020/21 Car CO2 targets,the electric car market hasgrownmoreslowlyin2022and2023.While the standards remainthesameuntil2025(requiringonlyaminimalincreaseinambitionin 2022-2024 toaccountfortighteningflexibilities),thebatteryelectricca

27、rsalesnonethelessgrewby28%in 2022,and by a further 37%in 20231,with around 1.5 mln battery electric cars sold last yearalone.This reflects the growing consumer demand,as well as smart incentives-notably forcorporateregistrations-whichallowcountrieslikeBelgiumtoseeimpressivegrowth.1ACEA,FuelTypesofNe

28、wCars2022and2023https:/www.acea.auto/fuel-pc/fuel-types-of-new-cars-battery-electric-12-1-hybrid-22-6-and-petrol-36-4-market-share-full-year-2022/#:text=%25%20Petrol%2C%2036.4%25-,In%202022%2C%20registrations%20of%20new%20battery%20electric%20vehicles%20(BEVs),a%20market%20share%20of%2022.6%25.A bri

29、efingby5Figure1:BEVsalesinEuropeHowever,a question o?en posed is where these batteryelectriccarsareproduced:locallyinEuropeor imported from China?Whenlookingatimports,onemightalsodifferentiatebetweenelectriccarsby Chinese brands(thatbenefitfromdecadeslongstatesupportacrossthevaluechain)andelectricca

30、rs by European and American brands that are similarly manufactured in China to benefit fromlowercosts(buttoasmallerdegree).Over the past 4 years,both the share of electriccarssoldinEuropebyChinesebrandsandtheshareof European and American brand cars produced in China and exported into Europe haveincr

31、eased.In2023,19.5%ofallEVsalesintheEU-or290,000units-wereimportedintotheEUmarket.Figure2:ShareoftheEUBEVmarketimportedfromChinaA briefingby6Until recently,the imports have been dominated by western brands exporting the vehicles fromChina into Europe,notably Tesla and Dacia by Renault(as seen in the

32、graph above).In 2023,Teslaaccounted for 28%of all China made EVs imported into Europe,while Dacias Spring added anadditional 20%.Unless action is taken,based on GlobalData forecast2,T&Eexpects296,000unitsbyby Tesla,Renault,BMW and other international OEMs(Smart,Volvo and Cupra)to be shipped intoEuro

33、pe in 2024,a jump of 70%compared to 2023,due to the increased production of multiplemodels in China including the Volvo EX303,the Mini Cooper4,theSmart#35ortheCupraTavascan6.In2025,theimportsareexpectedtobeafurther340,000units,representing12%oftheBEVmarket.On the other hand,the Chinese brands grew f

34、rom 0.4%oftheEuropeanBEVmarketin2019to7.9%overthefull2023,orbyafactorof20.Theycontinuetogrowandareexpectedtoreach8.1%ofallEUBEV sales in 2024(168,000 units)and 8.5%in 2025(243,000 units)based on GlobalDatas forecast.Assuming a linear growth in market share based on the last two years,T&E projects th

35、at ChineseOEMsalonecouldevenreach11%oftheEVmarketin2024,14%in2025and20%in2027.Figure3:ForecastofBEVsalesfromChinesecarmakersintheEU6https:/ briefingby7Currently MG is the leading Chinese carmaker in the EU with 25%of BEVs imported fromChinaandfour models selling more than 5,000 units(MG 4,ZS,5 and M

36、arvel R).Polestar is the second largestChinese OEM with its Polestar 2 model accounting for 7%of Chinese imports.The third largestChinese carmaker intheEUisBYD(4%ofChineseimports),mainlythankstotheAtto3model,whichsold just over 10,000 units.Other major Chinese car manufacturers include Great Wall Mo

37、tors withtheOrabrand,NioandXpeng.When we look across the European markets,Chinese brands seem to be targeting both matureandless mature BEV markets.In Germany their share was 6.9%in 2023,in Spain;10.6%.In France theshare was 9.6%in 2023,but is expected to drop significantly thisyearduetotheintroduct

38、ionofthenew EV subsidy scheme,or“eco-score”that would ineffecteliminatesubsidiestomostChinamadeEVs.WhileinSwedenandtheNetherlandstheirshareis13.3%and8.9%respectively.Looking at all BEVs imported from China,including those from Western carmakers,almost a third(29%)of BEVs sold in France and Spain com

39、e fromChina,mainlyduetothelargeshareofDaciaandTesla cars.In Italy and the UK,more than a fi?h of BEVs come from China(23%and 22%respectively).Their share is 17%in Sweden and the Netherlands,and 15%in Germany.Among thelargest car markets,France,Spain and Italyhavethehighestshareoverall,whiletheUKandS

40、wedenhavethehighestshareofChinesebrands.Figure4:ChineseBEVsalesinsomelargecarmarketsIf growth continues as in 2023/4,T&E estimates that electric cars made in China by all brands willaccount for 26%of all BEV sales in 2027.Within that,the share of Chinese brands is expected toA briefingby8overtake th

41、at of western ones,while the shareofwesterncarmakersimportswillshrink,inpartduetoTeslareducingimports.On average,9,800electriccarswereshippedintoEuropebyChinesebrandsmonthlyin2023,afigurethat is likely subdued bytherecentlyreported7shippingcontainershortage.In2024,thisisexpectedto rise to 19,000 per

42、 month.In a sign of whatscome,BYDhasrecentlystartedleasing8itsowncargoship,the Explorer No.1,toshipelectriccarsintoEurope.TheChinesecarmakerisexpectedtohave7dedicated vehicle carrier ships(or“ro-ros”)in the future9,as it targets the current logisticsbottleneck.SAIC is following suit10,likely not to

43、be the only one.Given this,it is possible that theabove figures are on the conservativesideandwithoutaction,amuchbiggerproportionofEUsBEVsaleswillbecomingfromChinainthecomingyears.3.ImpactofincreasedEVtariffs3.1CostcomparisonWhile Chinese electric car models sold in Europe are above the prices sold

44、in their home market,they are nonetheless cheaper than the European alternatives.Looking at the average EV pricesbased on 2023 sales,cars from Chinese OEMs are on average 5-27%cheaper depending on thesegment.MG 4,Polestar 2,MG ZS,BYD Atto 3 and MG 5 were the 5 top selling Chinese models in Europe in

45、2023.When one compares their average price to the BEV models from non-chinese OEMs,they are9-28%cheaperonaverage,asdetailedbelow.-MG 4 at an average11price of 38k compared to an average price of 42k forC-segmentBEVmodelsfromnon-Chinesecarmakers,or9%cheaper;-Polestar 2 at an average price of 53k comp

46、ared to an average price of 63k for D-segmentBEVmodelsfromnon-Chinesecarmakers,or16%cheaper;-MG ZS at an average price of 38k compared toanaveragepriceof53kforJC-segmentBEVSUVmodelsfromnon-Chinesecarmakers,or28%cheaper;11AveragebasedonstartingpriceintheNetherlandsofeachversionofthecar(eachversionbas

47、edondifferentbatterysize),fromEVDatabase.10Handelsblatt,https:/ briefingby9-BYD Atto 3 at an average price of 39k compared to anaveragepriceof53kforJC-segmentBEVSUVmodelsfromnon-Chinesecarmakers,or26%cheaper;and-MG 5 at an average price of 37k compared to an average price of 42k for C-segment BEVmod

48、elsfromnon-Chinesecarmakers,or10%cheaperFigure5:PricecomparisonbetweenChineseandothercarmakersThose with knowledge of China o?en point to a significant level of government subsidisation forChinese EV brands.State supportallegedlycoverssomeofthebatteryandbatterycomponentcosts,as well as lower land ac

49、quisition and energy costs.On top,companiesthroughoutthebatteryvaluechain have access to cheap credito?enunderwrittenbythelocalandnationalChinesegovernment.This,coupled with the EV production overcapacity vs the domestic demand,enables Chinesecompanies to significantly lower the final price of their

50、 electric vehicle models(or batteries sold tothem).E.g.an MG4 model in China(as MG Mulan)costs a mere USD 23,500,while a BYD Atto3equivalent(Yuan Plus)has recently been discounted to less than USD 17,000.Whether or not highlevels of direct and indirect subsidisation take placearerightlypartoftheanti

51、-subsidyinvestigationlaunchedbytheEuropeanCommission.The current tariffs applied to imports of China-made EVs into the EU is 10%,compared to the 15%tariffs that China levies on imports of European EVs into the country(and 27.5%in the US).If oneassumes an increaseintheEU(orUK)tariffby15percentagepoin

52、ts(tariffof25%ofthepre-taxvalueof the car instead of 10%today),medium C-segment cars and medium SUVs(JD-segment)sold byA briefingby10Chinese carmakers are expected tobecomemoreexpensivethannon-Chinesebrandsby8%and2%respectively.Other segments,including large cars(segment D),compact SUVs(segments JC)

53、andlargeSUVs(segmentJE),wouldremaincheaperbyanaverageof11%.Figure6:Pricecomparisonwithadditionaltariffs3.2RevenuegeneratedIt isimportanttorememberthattherevenuegeneratedgoesbacktothepublicbudgets,with75%ofitgoingtothegeneralEUbudget(asOwnResources)andtheremaining25%tothememberstates.If the tariffwas

54、 15 percentagepointshigherthanitistoday,anadditionalEUR1.4billionwouldhavebeen generated in 2023 based on all BEVs imported from China.This represents an additionalrevenue of over EUR 1 billion for the European Commission alone.This is more than the currentannual budget for the cleantech calls under

55、 the European Innovation Fund,and could have beenusedtosupportmorelocalbatterymanufacturing.Assuming a constant average market price of 42,700 for BEVs imported from China,T&E forecaststhat the 740,000 BEVs imported from China in 2025 would generate total revenuesof5.9billionforthe EU with a 25%tari

56、ff.If half of these cars were produced in the EU(i.e.the tariffwas provingeffective),the revenue would still be 3 billion.This could be directly channelled into the EUA briefingby11Innovation Fund(or a similar green industry funding mechanism)to support local cleantech scaleup.3.3EU-UKrelationshipTh

57、e EU and UK are important trade partners,with 18%of EUs car exports going to the UK in 2023.Following the UKs exit from the EU,the current trade in vehicles is governed by the Trade andCooperation Agreement(TCA).TCA includes provisions on the rules of origin,which define therequired local content fo

58、r electric vehicles and their batteries,to avoid tariffs on EV trade betweenthe two regions.If these are not met by the end of 2026,a tariffof 10%will be imposed from 2027onwards.This is designed to stimulate local manufacturing and scaling of the battery supply chainonbothsidesoftheChannel.However,

59、rather than thinking of the two blocks separately,a lot of synergies and benefits can beachieved by looking at Europe(the EU+the UK+Norway,etc)as one single battery supply chainblock.T&E analysis of the public pipeline of projects shows that while there is no cathode materialmanufacturing currently

60、planned,around a third of all European lithium processing projects areexpectedtobeinthesitedintheUK.Figure7:LithiumrefiningcapacityintheUK,GermanyandFranceSimilarly to the green alliance currently in place with Norway,the EU and the UK should form astrategy battery supply chains alliance.As an examp

61、le,lithium processed in the UK can be sentacross the Channel to the hub of battery component makers in Northern France,with resultingbatteries then fit into EV manufacturing sites across Europe and electric cars sold(and recycled)A briefingby12across the alliance countries tariff-free.On recycling,t

62、heUKisestimatedtoaccountforupto30%ofthe capacity to recycle lithium-ion battery scrap and end-of-life batteries by 2030.Many of the UKsEV manufacturing facilities already plan to use battery cells producedelsewhereinEurope,eitherinGermanyorFrance,socreatingsuchatariff-freeallianceiseconomicallyandst

63、rategicallynecessary.Figure8:RecyclingcapacityintheUKMore imminently,with the EU likely to increase its EV import tariffs,there is a risk that much oftheChinese capacity will find its way into the UK market,potentially undermining local EVmanufacturing plans.According to ACEA12,theshareofChinesemade

64、carsinUKBEVsalesstoodatasignificant 31,8%in 2022 and is likely to keep growing.The UK government should thereforecommission an investigationbytheUKsTradeRemedyAuthority intoitsEVimporttariffspolicyandincreasetheimporttariffsinlinewiththeEUandUSmarkets.4.Whataboutbatteries?Chinas playbook has o?en be

65、en to subsidise its own industry,limit foreign access to the domesticmarket,create overcapacity and then flood the other markets with those products.This enablesChinese companies to lower prices significantly,and it is therefore unlikely that raising the EV tariffonitsownwilltipthebalanceinfavouroft

66、he“MadeinEurope”EVsupplychain.On top of subsidies,what makes EV production in China so efficient and cost-effective is thecommercial large-scaledominanceintheentirevaluechain,frombatteriestoprocessingmetalsthatgointothem.12ACEA,2023,https:/www.acea.auto/fact/fact-sheet-eu-uk-vehicle-trade/A briefing

67、by13Figure9:GigafactorycapacitybyregionAt the heart of that value chain are lithium-ion battery cells.Over 80%of global lithium-ion batterymanufacturingistodayinChina13,expectedtodropto68%by2030thankstotheonshoringeffortsinboth Europe and the US.Battery cellsrepresentupto40%ofanaverageelectriccarval

68、ue,withoverhalfofthatlockedincathodeactivematerials(includingcobalt,nickel,manganeseandlithium).Europe has been catching up.A combination of long-term EV market certainty thanks to carregulations,the efforts by the European Battery Alliance and the influx of state aid in Germany andFrance(in respons

69、e to the subsidies in the US Inflation Reduction Act)have resulted in a healthypipeline of battery investments across Europe.MorethanEUR180blnhasbeeninvestedintotheEUbattery value chain,predominantly gigafactories,to date.Billions of state aidhavebeencommittedto projects such as Northvolt in Germany

70、 and Verkor in France.T&E estimates that 1.8 TWh ofcapacity cancomeonlinethisdecade(withtheproductionoutputof1.2TWh),morethanenoughforEuropesneedsfromallmannerofelectricvehicles,energystorageandothersmallerapplications.13BenchmarkMIneralsIntelligence,https:/ briefingby14Figure10:Batteryproductionand

71、demandinEuropeT&E analysis of the battery plant pipeline vs the expected lithium-ion battery(LIB)demand showsthat:-66%ofEuropesneedscanbemetin2024,risingto75%in2025,-Self-sufficiency is possible as early as 2026 if all projects come online on time and capacityplanned.ThisindicatesthatEuropehaspotent

72、ialtoproducemostofitslithium-ionbattery demandlocally.But executing all those plans on schedule and successfully will not be easy.Many are at risk,withBritishvolt in the UKandallegedlyItalvoltinItalyjustafewlatestexamplesthatfailed.Chinaisyearsahead in terms of technology commercialisation,mass manu

73、facturing and supply chainpreparedness.The US has both a strong anti-China policy that prevents easy access to the marketand generous production credits under the US IRA.Europehasneither,withthesupportannouncedvia national subsidies and the recently announced Battery Fund nowhere near the EUR 68 bln

74、 thattheCommissionestimates14willbeneededfortheprojectpipelinetomaterialise.Therefore,if it is Europes goal to have significant battery manufacturing in Europe it will need tointroducemeasurestocreateapulltomanufacturelocally.Suchmeasurescaninclude:14EuropeanCommissionNZIAassessment,https:/single-ma

75、rket-economy.ec.europa.eu/document/download/680f052a-fa6c-4f63-a1ec-c4866fa25a27_en?filename=SWD_2023_68_F1_STAFF_WORKING_PAPER_EN_V4_P1_2629849.PDFA briefingby15-Strongbatterysustainabilityrequirementsshouldrewardlocalcleanandcircularmanufacturing.Notably,the new carbon footprint rules being develo

76、ped under the BatteryRegulation should reward companies that use direct connection to new and local renewableenergy generation.Renewableenergycertificates(RECs)shouldonlybecountediftheproducercan reliably demonstrate a strict temporal(hourly)and geographic(same bidding zone)linktowheretheenergyisgen

77、erated.Ontop,anambitiousCO2thresholdisneededtocreateapullforbatteriesproducedlocallyandwithcleanerelectricity.-Strong“Made in EU”,or local content requirements.But only France has so far added suchrequirements to their EV subsidies via“eco-score”,while the 40%local manufacturingbenchmarkintheNetZero

78、IndustryActlacksteethandisnotbinding.Thisleavestradedefencepolicyasanothertooltouseintheshortterm.4.1Tradepolicy&EUsbatterycellambitionIf Europes goal istohavelocalbatterymanufacturing,itmightneedtorelyontradedefencetoolstocreate the business case to invest here.Currently EUs import tariffs on lithi

79、um-ionbatteriesarethelowest compared to the US and China:at just 1.3%currently(2.7%without the Autonomous TariffSuspension)vs10%inChina,andalmost15%forChinesebatterycellsimportedintotheUS.European battery cell manufacturing is more costlyandlesscompetitivetoday.OnCAPEXalone,theCommission estimates15

80、that the difference between Chinese and European factories is 32%,oralmost a third,on a GWh basis.Given the scale and knowhow,lower energy and labour costs andaccess to the well developed mid and upstream supply chain in China,it is hard to see whyautomakers would source a commodity made in Europeth

81、atismoreexpensive(andnotnecessarilyof better quality).Unless they have to(via Made in EU or local content requirements)or unless it ismadecheapertosourceitlocally.The EUs goal should be to localise battery cell production.In this case,the battery import tariffsshould reflect this ambition.According,

82、to BNEF,the average prices of battery cells in China werearound20%cheaperthantheEuropeanaveragein2023:15EC,2023,https:/single-market-economy.ec.europa.eu/system/files/2023-03/SWD_2023_68_F1_STAFF_WORKING_PAPER_EN_V4_P1_2629849.PDFA briefingby16Figure11:BatterypackpricesAccordingly,the EU should matc

83、h at least this level by the time its own capacity is ready to supplythe demand,e.g.raising the tariffto at least10%in2025,15%in2026and20%from2027.However,it is rumoured that Chinese battery makers already sell batterycellstoChineseOEMsatmuchlowerlevels than that,closertoESD50-60perkWh,sotheCommissi

84、onshouldinvestigatethisaspartofitsanti-subsidyprobeandactaccordingly.A briefingby17Figure12:T&EtariffproposalUltimately,ChinesecompanieshaveenoughleewaytoreducecostslowerthananyEUtariff,so tobeeffective,any tariffshould be accompanied by strong“Made in EU”provisions to create a businesscase to scale

85、 manufacturing in Europe.This includes public tenders and contracting(as“sustainability&resilience”provisions),EV subsidies and all manner of national and EU grants andloans.Given their technological knowhow and expertise,the result of such an increase intariffsisunlikelyto stop Asian battery manufa

86、cturers from entering the EU market.But instead of importing batterycells,it will incentivise onshoring the production and enable the EU to gain knowhow providedconditions(e.g.to state aid)are put in place to ensure local workforce inclusion.This will also givethe certainty needed for the many gigaf

87、actory plans across Europe that there is a market for theirproduct:the automotive industry will be committed to local sourcing,asitwillbecleartotheentireecosystem thatcheapimportsfromabroadwillnotbeacceptable.Ultimately,thiswillhelpavoidthehigher tariffs between the EU and the UK as part of the Trad

88、e and Cooperation Agreement assufficientvolumesoflocalbatterymanufacturingwillbeavailable.Concerns that the European battery market will becompletelydominatedbyChinesecompaniesdonot match the current project pipeline.The analysis of the current battery plans shows that onlyaround a fi?h are by Chine

89、se companies,while the predominant share,59%,is by Europeancompanies and start-ups.Europes first company to produce lithium-ion battery cells commerciallyA briefingby18in Sweden,Northvolt,has already started its deliveries and is expected to add asecondgigafactoryin Germany in the coming years.Howev

90、er,it is true that Chinese players have moreexperienceandknowhow to scale those factories faster,while European companies are likely to move slower andencounter more risks.But provided the EU creates a stronger caseformanufacturinginEurope,ourmarketwillmostlikelynotbedominatedbyChinesecompanies.Figu

91、re13:OriginofbatterycompanieswithproductioninEuropein20304.2Howtodealwithpossibleretaliation?On the otherhand,legitimateconcernshavebeenraisedaboutthepotentialretaliation,e.g.chokingoffmaterials,machinery or equipment imports into Europe that are critical to scale the plannedbattery cell factories.B

92、ut Europe should remember that both Europe and China inmanywaysneedeach other in this complex EV value chain.While Europe lacks expertise and manufacturinginpartsof the value chain,the overcapacity of EV and battery supply in China and the increasing localrestrictionsintheUS,Indiaandelsewheremakethe

93、EUandtheUKmarketscriticaltoChinaaswell.Given a higher risk of retaliation undermining theverysupplychaintheEUwantstobuild,moreofamutually beneficialagreementcanbefound.Chinesebatterycellimportscanbetaxedatthecurrentlower rates up to 10-15%of Europes demand,with theremaindertaxedhighersoastoenableloc

94、almanufacturingtoscalesuccessfully.Such flexible,or progressive,tariffs can be designed based on the concept of a tariff-rate quota,whereby a certain volume of imports can be subject to no/lower tariff,while theimportsabovetheagreed threshold pay higher tariff.This can allow somemarkettoChinesebatte

95、ryimporterstokeeptherelationsamicable,whilecreatingmanufacturinginEuropebecomeviableandisrealised.A briefingby19Tariff-ratequotasareacommonpracticeinothersectors,e.g.:-The EU has imposed TariffRate Quotas on steel as a safeguarding measure from severalcountries,such as the US,India and China.As part

96、 of this,imports of cold-rolled stainlesssteel sheets and strips over 30 376.69 tonnes from India and over 24714.52tonnesfromtheUS and imports of non-alloy wire over 77 963.72 tonnes from China haveanadditionaldutyrateof25%(whichisdecreasedeachyear).-The EU-Mercosur free trade agreement foresees tar

97、iff-rate quotas for agricultural products,e.g.the duty raises a?er the first 180 000 tonnes of poultry and 99 000 tonnes of beefimported.The more famous example of an amicable solution is the China-EUsolarpanelsettlementfollowingthe 2013 anti-dumping case,or the so-called price undertaking.This allo

98、wed Chinesecompaniestoexport up to 7 gigawatts of solar products annually tariff-free provided their price is not lower than56 cents per watt.This measure expired in 2018.The key difference with batterycellsisthatEuropeacted on solar panels too late,while we still have viable battery cell production

99、 plans that canbecome competitive.Acting preemptively and quickly is key,i.e.actingonbatterycellsnow,beforethe market is flooded with imports and before any anti-dumping starts to happen,as aprecautionarymeasureiswhatEuropeneedstodo.Such price undertaking,similar to the concept of tariff-rate quotas

100、,is an amicable solution in tradedefence proceedings allowed under the EU and WTO rules.A tariffduty is replaced by a volumeallowance based on a minimum import price(to avoid undercutting local producers).Companiesparticipating in the price undertaking agreement are exempt from tariffs,while those n

101、otcooperating are subject to high duty rates.A similar price undertaking can be agreed for ChinesebatterycellimportsintotheEU.5.PolicyrecommendationsAs the European Commission is deliberating its actions following the anti-subsidy investigation intoChinese EVs,T&E hopes this turns into a strategic r

102、evamp of the Unions trade policy and leads to tradedefencemechanismsbecomingacorepartoftheindustrialstrategyonEVsupplychains.Inparticular,T&Erecommendsthefollowing:1.The EU should raise the EV import tariffto at least 25%once the investigation concludesdistortive subsidies have been found(making thi

103、s WTO-compatible).This should apply to anymanufacturer importing EVs into the EU market.The UK government should match this in ordernot to become a dumping ground forChineseEVimports.ThegoalistoencouragelocalisationofmanufacturinginEurope.A briefingby202.Import tariffs on battery cells should also b

104、e increased progressively by 2027,when the EUproduction is expected to meet the demand.The tariffs should be gradually increased to theminimum level 20%to close the average cost gap with Chinese battery cells today.TheCommission should evaluate this as part of the investigation and set the tariffto

105、match the costdifference between Chinese battery cell prices and the European equivalent.To avoidretaliationthat could slow down Europes value chain build-out,the Commission should consider usingamicable trade tools,such as apriceundertaking,toallowapre-agreedvolume(e.g.10-15%)andaminimumpriceofChin

106、esebatterycellimportsintotheEUbenefitingfromlowertariffs.3.Ultimately,stronger“Made in EU requirements are needed to avoid China dumping prices inresponse to tariffs.These include provisions in national and EU-level grants,public tenders andother subsidies.The new EU Battery Fund should also help to

107、 localise manufacturing,and beoperationalised no later than Q3 2024 to support the short-term scale-up of battery cell andcomponent manufacturing in Europe.Mid-term,this should be turned into anEUGreenIndustryFund.The carbon footprint methodology of the Battery Regulation should reward directconnect

108、iontonewrenewablesupplyandsetstrictCO2thresholdsassoonaspossible.4.The EU and the UK should set up a strategic Battery Alliance that ensures a joint materials andbatteryproductionecosystemwithelectricvehiclestradedtariff-free.5.Higher tariffs should be accompanied by a regulatory push for faster BEV

109、 mass market.Thisincludes locking-in the 2035 EU cars&vans decision,agreeing ambitious corporate fleetelectrification targets and rolling out a European strategy for compact made in Europe BEV.Atnationallevel,smarttaxationtoincentiviseBEVtakeupisalsoimportant.There is a real risk that automotive job

110、s and know-how will leave the continent as European legacycarmakers havebeenslowtotransitiontoelectric.TheaimofEuropestradepolicygoingforwardshouldbe to secure local manufacturing,ie“made in Europe”but not only by European companies.It is alsoimportant that this does not lead to outright protectioni

111、sm and a shrinking offer of affordable BEVs forEuropean consumers.On the contrary,as higher tariffs will not stop Chinese brands from coming intoEurope(they will build factories here),it should be accompanied by an accelerated production of EVs,battery cells and components(e.g.cathodes)by European companies.Goingfaster,notslowingdown,istheonlywaytofendoffforeignimportsintoEurope.FurtherinformationJulia PoliscanovaSeniordirector,vehicles&emobilitysupplychainsTransport&Environmentjulia.poliscanovatransportenvironment.orgA briefingby21