Chinese EV makers continue aggressive push into Europe under growing threat of tariffs

PARIS — Chinese electric car manufacturers are growing into Europe, despite politicians raising the prospect of heavy taxes on automobiles from the world’s second-largest economy.

Nio opened a shop in Amsterdam this week, while Xpeng unveiled its G9 and G6 SUVs in France last week. At the VivaTech convention in Paris, both Xpeng and BYD displayed their vehicles.

The public marketing efforts come amid an ongoing investigation by the European Commission, the European Union’s executive arm, into subsidies provided to Chinese electric vehicle manufacturers. The findings of this investigation could lead to levies on Chinese EV imports.

The US has already taken such a move, with the Biden administration placing 100% tariffs on Chinese electric vehicle imports.

Chinese electric vehicle manufacturers are growing globally to compete with Tesla and obtain a competitive advantage over established automakers.

Companies such as BYD have expressed concerns about the competitive pricing of vehicles. BYD offers the Seagull, a compact all-electric hatchback priced at 69,800 yuan (less than $10,000). The capacity of Chinese manufacturers to launch low-cost vehicles could put pressure on established automakers, who may be unable to match the discounted pricing.

China’s EV business has grown in recent years as a result of government incentives and assistance, which has disturbed politicians in Europe and the United States.

When CNBC asked about prospective EU tariffs this week, French Finance Minister Bruno Le Maire declined to clarify that such measures are on the way. However, he stated that his goal is to “protect our industry and ensure a level playing field on the international stage.”

Tesla’s Musk, for example, has stated that he is opposed to taxes on Chinese electric vehicles.

“Neither Tesla nor I asked for these tariffs,” Musk told CNBC’s Karen Tso during a Q&A session at the VivaTech conference on Thursday.

“In fact, I was surprised when they were announced,” he explained, referring to the United States’ 100% import tariff.

Musk warned earlier this year that if trade obstacles were removed, Chinese EV players would “demolish” their international competitors.