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EU BEV industry requires CO2 targets and tariffs: T&E

  • : Battery materials
  • 24/10/04

European carmakers will lose market share of battery electric vehicle (BEV) sales in Europe to Chinese-owned competitors unless the EU imposes planned CO2 targets alongside tariffs, according to lobby group Transport & Environment (T&E).

The European Commission announced today that it will go ahead with provisional tariffs on Chinese-made EVs.

T&E forecasts that imports of Chinese-owned brands will account for over 12pc of the EU BEV market this year, up from 8pc last year, while imports of non-Chinese brands will edge up to 13pc from 12pc (see graph). And if the EU does not impose its planned reduction targets on CO2 emissions, imports of Chinese-owned brands of BEVs are set to rise to almost 15pc, while non-Chinese brands will continue to hover at around 13pc.

The EU's CO2 target sets out that all carmakers must achieve net zero CO2 emissions by 2035 across each fleet of sales, with milestones in place before 2035, starting next year. But the legislation has been under scrutiny lately, which has prompted pushback from a number of firms seeking stability.

"The path to 2035, including specific CO2 milestones, was established in 2014 and 2019," Paris-based charging start-up Electra's chief executive Aurelien De Meaux said. "We rely on this stability to make informed and effective investments and ask the legislator to not change the rules during the game."

The rising market share of Chinese-owned BEV brands would be tempered if the EU maintained its CO2 targets, according to T&E, as European firms would be incentivised to focus on selling affordable BEVs to hit carbon neutral targets instead of focusing on selling more profitable internal combustion engine models.

A separate analysis by consultancy Rhodium Group found that the profit margins of Chinese-owned brands when imported to Germany will still largely exceed the cost of the EU's newly proposed tariffs, suggesting that tariffs alone are insufficient to protect western EV makers (see graph).

And imported models from western carmakers Tesla and BMW, occupying the bottom three bars of the graph, are all set to become unprofitable once tariffs are imposed, illustrating that the EU's tariffs may do more harm than good to western carmakers with plants in China, such as BMW.

In response, China has considered imposing retaliatory tariffs on other goods.

Chinese carmakers have also mulled the possibility of building EV plants overseas (see graph). Since 2022, 11 plants in the EU have been planned, although only three have passed the planning phase, owing to the uncertainty over tariffs from the EU. Chinese-owned plants planned elsewhere have been more successful at reaching the construction phase.

The market is similarly unclear on battery production, according to T&E, with 59pc of announced production capacity "less likely" to go ahead by 2030. T&E deems a further 10pc "more likely", with 15pc currently under construction and just 17pc of announced capacity currently operating.

Percentage of the EU BEV market imported from China, by brand pc

Profit margin of Chinese-made EVs when sold to Germany, by brand pc

Status of Chinese EV plants by region since 2022

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24/11/08

Japan’s domestic EV sales fall further in October

Japan’s domestic EV sales fall further in October

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Finland's Terrafame to cut battery jobs on EVs slowdown


24/10/30
24/10/30

Finland's Terrafame to cut battery jobs on EVs slowdown

London, 30 October (Argus) — Finnish battery chemicals maker Terrafame is set to cut its workforce on slowing demand for electric vehicles (EVs) and battery materials, joining a growing number of companies adjusting their operations in view of challenging market conditions. "According to the company's initial estimate, the maximum personnel reduction need would be 75 person-years," the firm said, nearly 10pc of its 826-strong workforce as of the end of last month. The firm is also looking to shift employees to part-time positions and change job descriptions. The news is the latest in a series of blows for the Finnish firm, after reporting a 34pc year-on-year fall in battery chemicals sales revenue over the first half of this year. And in April, the firm temporarily halted one of its battery chemicals plants after several weeks of workers strikes. Terrafame has supply agreements with German cathode active materials producer Umicore , American-French-Italian carmaker Stellantis and French carmaker Renault for high-grade nickel sulphate to be used in EV batteries. By Chris Welch Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Korea's LGES sees battery market uncertainties in 2025


24/10/29
24/10/29

Korea's LGES sees battery market uncertainties in 2025

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Atlas Lithium granted permit for Brazil plant


24/10/28
24/10/28

Atlas Lithium granted permit for Brazil plant

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Lower-cost models to lift 2025 EV sales: Tesla


24/10/25
24/10/25

Lower-cost models to lift 2025 EV sales: Tesla

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