Chinese car makers must be charged import tariffs in Europe, or European cars be given favourable subsidies, if the continent’s car makers are going to be able to compete with China.
That’s according to Stellantis boss Carlos Tavares, who said that European political leaders should “stop being naive and dogmatic” and recognise that, by legislating in favour of electric vehicles, they are forcing manufacturers to make cars the middle classes can’t afford and steering them towards Chinese models that put the future of the European car industry at risk.
“People cannot afford a safe, clean vehicle,” he said. “Why do we keep adding constantly to the price of cars if they’re safe and clean, and people can enjoy freedoms? A debate has not been had. I ask EU citizens to ask their political leaders for a clear position: are you for or against the freedom of mobility?
“If not, do you want to put your mobility in the hands of the Chinese state? Stop putting restrictions on cars, stop threatening jobs, as making cars has become too expensive.”
Western cars are subject to tariffs and greater restrictions when sold in China, but there are no such restrictions for Chinese cars being sold in Europe.
“Conditions here are easier for Chinese car makers to compete than for Western car makers in China,” said Tavares. “The EU is wide open and it is not acceptable. Don’t support Chinese companies in Europe with easier rules than we’re getting there.”
China has been able to make inroads into the Scandinavian market as buyers there are more brand-agnostic, he said. “That’s why China goes there, with aggressive pricing that I can’t see them making a profit on.”
Tavares believes Chinese car makers are 10 years ahead of their European counterparts in developing electric cars, and being able to build them with greater control of the supply chain and therefore cost. To that end, he advocates tariffs on Chinese-made cars until 2035 to allow European car makers to catch up and be able to compete on fair terms, or for favourable subsidies to be put on European cars. After that point, tariffs should be lifted to ensure European car makers can be globally competitive.
“In this transition period, we need to protect our industry,” he said.
Without tariffs, the only way for European car makers to compete with China is to become even more productive and to find greater efficiencies in building cars. “We’re ready for the fight but it’s going to be harsh,” said Tavares.
“If we don’t protect the industry in this period and keep this vulnerability to Chinese imports, it creates a bigger risk going forward where we will lose our industry. I don’t think leaders want that but there is a reality it could happen.It might be the strategy from China to be in the red for a few years, to grow the market share, and to then grow their prices when we disappear.”
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