How Jaguar Land Rover solved its China problem
JLR’s deal with Chery to revive the Freelander with Chinese tech leaves the U.K. automaker to focus on more profitable imports.
In reviving the discontinued Land Rover Freelander in China with its joint venture partner Chery Automotive, Jaguar Land Rover has fixed the problem of what to do with the JV’s factory in Changshu, near Shanghai.
EU presses ahead with Chinese EV tariffs after divided vote
Commission says it has necessary support for tariffs
Says will continue talks on pricing with Beijing
More states back tariffs than oppose, many abstentions
Case is Commission’s biggest trade clash with China in a decade
Beijing has threatened retaliation if tariffs go ahead
A FATAL SIGNAL
China’s Commerce Ministry expressed strong opposition to planned EU tariffs, calling them “unfair, non-compliant and unreasonable”, violating World Trade Organization rules, although it made no mention of any counter measures. It has already launched a WTO challenge.
BMW (BMWG.DE), opens new tab Chief Executive Oliver Zipse described the vote as “a fatal signal for the European automotive industry”. Geely Holding (GEELY.UL) expressed “deep disappointment” in the Commission’s decision.
Hungarian Prime Minister Viktor Orban said the EU was headed for an “economic cold war” with China.
However, France’s PFA car association said it was good EU members had backed duties, adding it was in favour of free trade, as long as it was fair.
Stellantis (STLAM.MI), opens new tab said the sector was under pressure from ambitious carbon reduction plans and “the Chinese global commercial offensive”.
For consumers, the tariffs could mean higher EV prices, undermining the EU goal of being carbon neutral by 2050.
Campaign group Transport & Environment said the EU should not delay 2025 CO2 reduction targets, as some carmakers want, as this would cause EU production of EVs to stagnate.
“The EU risks having the worst of both worlds if it delays the 2025 CO2 targets while limiting the affordable models imported from China,” it said.
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HARDENED STANCE
The EU’s stance towards Beijing has hardened in the last five years. It views China as a potential partner in some areas, but also as a competitor and a systemic rival.
The Commission says China’s spare production capacity of three million EVs per year is twice the size of the EU market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.
As part of continued negotiations with China, the Commission could re-examine a price undertaking – involving a minimum import price and typically a volume cap.
A case in point is Volvo Cars, which is majority owned by Geely. The company hopes to avoid hefty tariffs when importing its China-made EVs by reaching a pricing agreement.
The EU tariffs range from 7.8% for Tesla (TSLA.O), opens new tab to 35.3% for SAIC (600104.SS), opens new tab and other companies deemed not to have cooperated with the EU investigation. These tariffs are on top of the EU’s standard 10% import duty for cars.
Laurent Ruessmann, partner at RB Legal, who defended EU industry in the solar panel case a decade ago, was sceptical about the effectiveness of the measures.
“It was so difficult even to get these measures,” he said. “It’s better than solar panels, but is it enough to save an industry? I would be surprised.”