BEVs must capture consumers’ imaginations to succeed

Western automakers are struggling to match the economies of scale achieved by their Chinese competitors in the e-mobility space. While some analysts consider this an opportunity for legacy brands to re-examine their product offerings and manufacturing techniques, regulators are taking a more punitive approach to check China’s growth.

In May 2024, US President Joe Biden announced an import tariff increase from 25% to 100% on Chinese-made electric vehicles (EVs). The EU currently intends to impose its own provisional tariffs of up to 38.1% from 4 July. Decisions in both cases involved the determination that these products receive “unfair subsidies” from China’s government.

However, these tariffs have received criticism from both sides of the aisle. On 13 June, Chinese Foreign Ministry spokesperson Lin Jian called out the EU for “politicising” an economic/trade issue. Meanwhile, Stellantis Chief Executive Carlos Tavares called increased tariffs a protectionist “trap” that will ultimately serve to make American and European brands less competitive on the global stage.

Decelerating EV adoption in the West during H1 2024 might have emboldened authorities to legislate against China’s generally cheaper products. But is this a tenable long-term strategy?