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Stellantis will shift production of some Chinese-branded electric vehicles to Europe, in the latest sign of how global carmakers will change their regional strategy following Brussels’ announcement this week of planned additional tariffs on Chinese-made electric cars.
The owner of the Citroën and Fiat brands announced in May that he will sell electric vehicles from the Chinese car manufacturer Leapmotor at its European dealers from September. However, CEO Carlos Tavares confirmed on Thursday that some cars would be produced at Stellantis factories in Europe.
“A certain number [Leapmotor] products will have to be assembled in Europe,” said Tavares, speaking at Stellantis’ annual meeting in Detroit. He added that the planned tariffs from Brussels corrected “a lack of competitiveness” between European carmakers, compared to Chinese rivals.
Tavares said the tariffs announced by the European Commission were at levels above which the company had previously agreed it would make sense to import rather than produce locally.
Even before Brussels’ announcement to slap up to 38 percent extra tariffs on Chinese electric vehicles, some Chinese auto groups had planned a shift to Europe.
China’s largest EV maker BYD, which received a lower tariff increase of 17.4 percent, plans to start producing cars at a new site in Hungary next year and is exploring locations for a second factory in Europe. Another Chinese EV manufacturer, Chery, aims to produce 150,000 cars a year from a factory in Barcelona from 2029.
Daniel Schwarz, an automotive analyst at Stifel, predicted that Chinese OEMs would accelerate building their production capacity in Europe over the next three years.
“In [the] short-term [tariffs are] This is positive for the European car manufacturers, but in the long term it is negative because in the long term they will lead to more investments in Europe by Chinese companies, more capacity and the price pressure will be similar to what we see now in China,” he said. .
The tariff proposals have also underlined the divisions in the European auto industry between German carmakers, which are dependent on the Chinese market, and the French and Italian groups that have not penetrated China and are more dependent on the European market.
Carmakers such as Stellantis and Renault had long warned that a wave of cheaper Chinese models would outpace European rivals, while Germany’s Mercedes and BMW lobbied vociferously against rising protectionism, fearing reprisals from China.
“German industry is highly exposed to Chinese business. And you know very well that this is why Germany opposes these tariffs,” Tavares said.
German automakers universally reacted negatively to the tariffs, offering support for “free trade” and warning of retaliation in China – their main market.
“Fair and, above all, free world trade is very important and stimulates innovation and growth,” says Mercedes CEO Ola Källenius, who considers China to be the largest market with around 36 percent of global turnover.
“The European Commission is thus harming European companies and European interests,” said BMW CEO Oliver Zipse. “Protectionism threatens to cause a spiral: tariffs lead to new tariffs, to isolation instead of cooperation.”
The Bavarian carmaker considers China its largest market, with 32 percent of total sales – and is also directly affected by the tariff increase – by 21 percent – as it produces and exports its iX3 electric car in Shenyang. it to Europe.
“Tariffs will buy time, but won’t solve the problem,” said another European driver. “European car manufacturers need time to come up with cheap alternatives,” they added – drawing a comparison to the disruption of the European aviation sector by low-cost airlines such as Ryanair.