“because there is no Chinese chip manufacturing industry to support, Huawei faces the problem of no chips available.
” At the Huawei developer conference in 2020, Yu Chengdong, CEO of Huawei’s consumer business, said frankly that Huawei would face a “lack of core”, saying that this was a lesson for Chinese companies in the process of globalization.
At that time, the United States added Huawei and its subsidiaries to the list of controlled “entities” on national security grounds, prohibiting American companies from selling related technologies and products to them.
After that, component manufacturers, including TSMC and Qualcomm, will no longer supply chips to Huawei.
The use of technology monopoly by the United States to suppress Huawei not only challenges the bottom line of the international supply chain and industrial chain, but also disturbs the healthy development of the global chip market.
Huawei immediately encountered the plight of “lack of core”, and China’s chip industry was also tested.
This ugly act of “cheating if you can’t beat it” has been seamlessly grafted from the US malicious sanctions on Huawei in 2019 to the current EU proposal to impose countervailing duties on Chinese electric vehicles.
On June 12, the European Commission announced that it planned to impose countervailing duties of 17.
4%, 20% and 38.
1% respectively on SAIC, Geely Holdings and BYD.
Other manufacturers of Chinese brand battery electric cars that participated in the survey but have not yet been sampled will be subject to a weighted average tax of 21 per cent.
At the same time, the European Commission said that if a solution cannot be reached with China, the plan will be implemented from July 4.
This means that the Chinese car companies will face the fate of sanctions if they do not comply with the relevant shameless demands of the European Union before July 4.
In this regard, car companies, including SAIC, Geely Holdings and BYD, as well as the Ministry of Foreign Affairs of China, the China Association of Automobile Manufacturers and other departments and organizations have expressed disappointment and opposition.
Not only that, long before the European Commission announced the increase in countervailing duty, it received opposition from a number of European car companies, such as BMW Group, Mercedes-Benz Group, Volkswagen Group and so on.
In the view of European car companies, it is a wrong decision for the European Commission to impose tariffs on Chinese electric vehicles, which will hinder the development of European car companies and harm Europe’s own interests.
Protectionist measures such as increasing import tariffs cannot help European car companies enhance their global competitiveness.
So the question is, what on earth have Chinese cars done to make the European Union so panicked? why are European car companies also opposed to sanctions? Chinese cars panicked the European Union.
“now it is too common for Europe to see Chinese cars.
” Some time ago, a media colleague who had just returned from a trip to the EU countries introduced this to me.
She has just been driving a test car provided by a domestic manufacturer and has been driving all over Europe for more than half a month.
From her statement, it is not difficult to see that Chinese cars, especially electric cars, are very popular in Europe and already have a good export scale.
However, it is precisely because Chinese cars have made great progress in Europe that they have attracted the “attention” of the EU authorities.
On September 13, 2023, European Commission President von Delaine announced in his annual speech to the European Parliament that he would launch a countervailing investigation against Chinese electric vehicles.
The reason is that Chinese car companies have received huge subsidies from the state, which have been able to hold down export prices, which constitutes unfair competition for local European car companies.
After more than half a year of evil brewing, there are EU sanctions against Chinese electric vehicles at the beginning of this article.
Anyone with a discerning eye can see through the nature of the matter, and it is self-deceiving to attribute the success of Chinese electric cars in the European market to government subsidies.
It is true that government subsidies play a certain role in supporting the development of Chinese cars, but the formulation of policies is the ultimate reason for pointing out the direction for China’s electric vehicles at the strategic level.
In this technology, Chinese electric vehicles have gained competitive advantage after years of intense competition, and this revolutionary change has enabled Chinese cars to successfully change lanes and overtake, bypassing the internal combustion engine.
And make a Chinese voice in major markets around the world.
In contrast, in the face of great changes that have not occurred in the automobile industry in a century, many traditional European car companies have chosen to lie on the merit book of internal combustion engines for a long time and are unwilling to come out to do research and development and make products.
The lack of strategic attention has led to its overall backwardness in intelligence, cost, battery technology and service experience, so its competitiveness is not enough.
Even the mainstream traditional brands that had to eat and drink in the last era are at a disadvantage under the offensive of China’s automobile Sandian.
At this time, someone is jealous-when the eyes are black, the heart is red, once the eyes become red, the heart will turn black.
Seeing that Chinese electric cars are so popular in Europe, the “beautiful baby” of the European Union quit.
Before the sanctions, Chinese electric vehicles had risen rapidly in the European market.
Domestic electric vehicles accounted for less than 3 per cent of the European market in 2020, up from 22 per cent last year, according to data.
This frenzied expansion is too much for a group of European carmakers to bear.
As a result, Chinese electric vehicles, which originally relied on the world’s leading battery production capacity, raw material supply chain and price advantages, have become an “eyesore” of the European Union.
After all, cheaper and more competitive Chinese electric cars continue to erode the market share of local European manufacturers, causing panic across Europe and pressing the criminal sanctions button.
However, the move to impose sanctions on Chinese cars was first opposed by local European companies.
Volkswagen Group believes that the EU’s decision will do more harm than good to Europe, especially the German automobile industry, and the move may also lead to serious retaliation.
BMW Group Chairman Ziptze also said that trade protectionism is bound to trigger a chain reaction-tariffs in response to tariffs and isolation instead of cooperation.
Mercedes-Benz CEO Corinson called directly for the need to further reduce import tariffs on Chinese electric vehicles to encourage European companies to do better.
European car companies are right to worry.
For European car companies, they need to pay more attention to electrification strategically in order to enhance their market competitiveness, rather than attacking their competitors by market-oriented means.
After all, to say the least, if China’s imports of electric cars fall after the tariff, the gap in demand will also be filled by other cars produced in the EU, which means European consumers will have to bear higher unit prices.
In this regard, Chinese car companies do not panic at all, and even want to laugh.
Chinese cars are unstoppable to the world.
In fact, not only the European market, Chinese cars, especially electric vehicles have made good progress in major markets around the world in recent years, which is why the author thinks that Chinese car companies have the strength to laugh.
However, the European market has always been considered to be a more mature market than other markets, and there are a large number of brands that can play well in the era of internal combustion engines.
As a result, when Chinese cars, once regarded as cheap and low-end, succeeded in “killing” into the European market, the latter was surprised by the strong competitiveness at this speed.
Statistics show that the sales volume of Chinese car companies in 13 European countries last year was ranked as follows: SAIC ranked first with more than 240000 vehicles, Geely Group ranked second with sales of more than 220000 vehicles, and BYD ranked third with nearly 160000 vehicles, followed by Great Wall Motor, Lulai Motor, Xiaopeng Automobile and Dongfeng Group.
From the rankings, we also know why SAIC, Geely Holdings and BYD have suffered sanctions.
Among them, SAIC was taxed with the highest tax rate of 38.
1%, on the grounds that SAIC did not cooperate with the EU investigation, so it was “given priority”.
In response, SAIC insiders responded that this was a complete fabrication and misreading.
SAIC actively cooperates with the provision of relevant materials, but the scope of the EU investigation has seriously exceeded the scope related to countervailing investigations.
For example, SAIC is required to provide details of the core technologies of three electric vehicles of its own brand, as well as information on joint ventures such as SAIC Volkswagen, which does not export electric cars to Europe.
Well, my mother tongue is speechless.
It is hard not to feel that the largest tariff imposed by the European Union on SAIC has an inseparable reason for the rampant spread of its electric vehicles in Europe.
After all, SAIC ranked first in Chinese car exports in Europe last year.
However, imposing tariffs will not stop SAIC from going out to sea.
Because SAIC exported more than 1.
2 million vehicles last year, and the European market accounted for only a small part of its total sales.
According to industry estimates, in the first four months of this year, the European market contributed only 1% to 3% of the total sales of SAIC, Geely and BYD.
In addition to the limited impact of the European market on total car sales in China, the latter also has a sufficient cost advantage to absorb the additional tariff costs and maintain good profits.
The European Commission estimates that the price of electric cars in China is usually 20% lower than similar models made in the European Union.
With the increase of tariffs, the price of Chinese cars will be similar to that of European cars, but the former still has obvious advantages in design, technology and cost.
Even if tariffs are imposed, BYD’s profit per car in Europe is still about 1.
5 times that of selling the same car in China, JPMorgan analysts said.
” By contrast, European carmakers are likely to suffer losses.
Because European carmakers are more dependent on the Chinese market, when their profits in the Chinese market fall, the blow is heavy.
For example, China is the most important single market for German automakers.
In the first quarter of this year, the Chinese market accounted for about 30% of BMW, Volkswagen and Mercedes-Benz sales.
As a result, German automakers are generally concerned that imposing tariffs on China is likely to counter German carmakers such as BMW, Volkswagen and Mercedes-Benz.
As a result, analysts at relevant Wall Street institutions have also warned that the European Commission’s decision to impose tariffs on Chinese electric cars may have a limited impact on Chinese car companies, but will have an impact on European automakers.
As a result, on Wednesday, local time, Volkswagen shares fell 1.
2%, BMW 0.
9% and Mercedes-Benz 0.5%. In addition to concerns about possible countermeasures, EU tariffs will also hit cars made by European carmakers for European consumers in China.
For example, Renault’s Dacia pure electric model Spring is made in China and exported to Europe, while Dongfeng, a joint venture with Renault and Dongfeng, is also likely to be subject to a 21% tariff by the European Union.
Not only that, the European auto industry is highly dependent on Chinese parts, especially electric car parts, because China dominates the supply chain in this sector.
If EU tariffs on China trigger retaliation, it could hinder the process of electrifying EU cars, because it is not so easy to produce cars in Europe without imports from China.
For Chinese car companies, after the EU imposes tariffs, the attention of their exports will turn to markets such as the Middle East, Latin America and Southeast Asia, where the share of electric vehicles is growing rapidly.
In addition, Chery and Spain’s Ebro-EV Motors have agreed to set up a joint venture to jointly develop electric vehicles.
Stellantis has also set up a joint venture with Zero.
Five years ago, robber-like chip sanctions in the United States not only failed to destroy Huawei, but successfully forced the rapid progress of China’s chip industry.
Today, China’s IC exports are growing obviously, constantly turning towards the goal of independent supply.
China is rapidly becoming the world’s main source of wafer production capacity, and Chinese mainland wafer capacity is expected to account for 22.
3% of the world in 2026, surpassing South Korea and Taiwan Province of China, ranking first in the world.
At present, globally, the market share of domestic chips has exceeded 30%.
Under the heavy pressure of chip sanctions, it has yielded fruitful results, which not only heralds the revival of China’s chip industry.
It also highlights the phased achievements of the collective breakthrough of China’s high-tech industry and economic transformation and upgrading-those that cannot be killed will eventually make you stronger.
Now this means of surpassing the fair and free trade rules itself has come to the cause of Chinese car exports.
I am very confident that the Chinese cars that have been armed to the teeth will eventually sail to the world and be unstoppable.
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