European Union Tariffs on Chinese Electric Vehicles: Impacts for Electric Vehicle Uptake in Europe and European Climate Goals

Abstract

Electric Vehicle (EV) sales have grown immensely over the past decade, and the European Union (EU) has emerged as a leader in both the production and consumption of electric vehicles. With net-zero emissions initiatives helping push the transition toward electromobility, the EU hopes to reduce emissions by 55% by 2030 and 100% by 2035 for new vehicle sales. China has recently become the global leader in the production and export of EVs, with the country exporting 1.6 million vehicles in 2023 and accounting for around 60% of new EV registrations in the same year. While many countries, such as the United States and Canada, have effectively closed off their markets to Chinese EVs, the European Union has become China’s top importer of these cars, with the EU having imported 20% of the total EV market from China in 2023. Recent concerns from the European Commission about Chinese government support for their manufacturers through the use of tariffs, however, prompted an investigation into the Chinese EV industry. This investigation resulted in the implementation of countervailing tariffs on various manufacturers within China (both Chinese and non-Chinese) based on the level of government support that each manufacturer receives. In this thesis, I analyze the effects that these tariffs will have on EV uptake and the EU’s emissions reduction goals, as well as the current barriers to widespread EV adoption in both trade and domestic policy. Using qualitative information collected from interviews with policy and industry experts, this thesis contributes to the dialogue of the effects of tariffs on consumers and how they can potentially impede progress toward climate goals. I begin by providing necessary background information on the European and Chinese EV industries, as well as the specifics on European climate goals. I then discuss the tariffs themselves and the justification behind them, as well as relevant literature about the tariffs. Next I discuss the key findings from the expert interviews where I find that the tariffs alone are unlikely to significantly impact EV uptake or derail the EU’s 2030 emissions targets but may signal a broader shift toward protectionism and industrial self-reliance. Instead, I highlight key barriers to EV uptake, including affordability gaps, inconsistent subsidy frameworks, and underdeveloped infrastructure, and make policy recommendations that would improve both the trade and domestic policy approach to EVs within the EU.