TMTPost --  The American Depositary Receipts (ADRs) of Chinese elelctric vehicle (EV) makers were hit hard on Friday after the European Union started imposing higher tariffs on EV imports from China.

Credit：Zeekr

Shares of  Zhejiang Zeekr Intelligent Technology Co., Ltd., a unit under Volvo’s owner Zhejiang Geely Holding Group, slumped more than 8.7% that day, and shares of its domesitic peers Nio Inc., Xpeng Inc. and Li Auto Inc. dropped 5.1%, 4.8% and nearly 1.3%, respectively. These Chinese EV startups underpermed the market as the U.S. stock benchmark S&P 500 closed over 0.5%, hitting its record for three trading days in a row.

Shares of Chinese EV companies pulled back in the wake of the EU’s decision to levy additional tariffs on EVs. Nio now delivers EVs to Germany, the Netherlands, Denmark and Sweden. The Shanghai-based company said in its 2023 annual report filed in April that its business could be hurt by protectionist policies. Xpeng also said in its latest annual report that its exports could be hurt by antisubsidy moves by the E.U., as the company has stores in the Netherlands, Sweden and Denmark.

The European Commission announced Thursday it imposed provisional countervailing duties of up to 37.6%, on top of the ordinary BEV import duty of 10%, on imports of battery electric vehicles (BEVs) from China. The executive arm of the EU concluded through an anti-subsidy investigation that the BEV value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.

Specifically, the additional individual duties on three sampled Chinese EV makers, would be 17.4% for BYD, 19.9% for Geely and 37.6% for SAIC. That means the EU decided to levy a little bit less duties on Geely and SAIC-made EVs since its pre-disclosed proposed rates are 20% and 38.1%, respectively, while BYD, China’s largest EV manufacturer, faces the same tariff rate as EU’s original proposal disclosed on June 12.

According to a statement of the European Commission , other BEV producers in China, which cooperated in the investigation but have not been sampled, are subject to the 20.8% weighted average duty, marginally downgraded from the Commission’s original proposed 21%, while all other BEV producers in China that did not cooperate in the investigation face an extra duty of 37.6%, compared with the original proposed 38.1%.  

China has repeatedly expressed strong opposition to the EU's anti-subsidy investigation on China's EVs, and advocated properly handling economic and trade frictions through dialogue and consultation, said He Yadong, spokesperson for he Ministry of Commerce of China (MOFCOM).  “There is still a four-month window before the (EU’s) final ruling. We hope that the European side will work with China to meet each other halfway, show sincerity, speed up the consultation process, and, on the basis of rules and reality, reach a mutually acceptable solution as soon as possible,” He told reports at regular press last Thursday.ed.

At a regular press last Friday, Mao Ning, the spokesperson of China’s Foreign Ministry, reiterated China had already expressed firm opposition more than once to the EU’s anti-subsidy probe into Chinese EVs. While stating the specific trade issues should be resolved properly through dialogue and consultation, Mao stressed China will also take necessary measures to firmly safeguard its legitimate rights and interests.