China EV Makers to Shift to Emerging Markets

Amid Western charges that excessive subsidies have rendered China's electric vehicles (EVs) unfairly cheap, some Chinese automakers have begun to shift their focus to friendlier emerging markets. The United States and the European Union have imposed higher tariffs on Chinese EV imports in an effort to mitigate the competitiveness that they feel such subsidies provide. 

The EU also expects that the move will address Chinese industrial overcapacity in the bloc. The EU's higher levies went into force on Friday (Jul 5), with a final decision expected in four months while vigorous negotiations continue. The German auto sector has appealed for the tariffs to be lifted, fearing the widespread response that Beijing has threatened. The United States will raise taxes on Chinese EVs to 100% later this year, up from 25% currently. 

Canada is debating taking the lead. While European and US markets are vital, they are not the only ones, according to Dr. John Quelch, executive vice-chancellor of Duke Kunshan University in China. He noted that there are "plenty of opportunities" for the Chinese EV export market and manufacturing to expand internationally.

In addition to marketing their products in emerging markets, Chinese EV manufacturers have begun to set up manufacturing in local industrial parks to avoid unnecessary restrictions, according to Dr. Li Fang, country director of the World Resources Institute China.