EU Announces Provisional Tariffs Against China EVs + new A290, Panda and more - MOBILITY BRIEF_ ??????? - June 17th

? HIGHLIGHT: The European Commission announces provisional tariffs on Chinese EVs

?? The European Union contends that Chinese electric vehicle manufacturers benefit from disproportionate subsidies, giving them a competitive price advantage over European counterparts. To address this, the EU is disclosing provisional tariffs of up to 38%, which aim to create a fair competition landscape but might also lead to higher costs for consumers.

Depending on each carmaker contribution to the inquiry, the tariff are expected to vary, with the following rates already disclosed by the EU:

• BYD: 17.4%
• Geely: 20%
• SAIC: 38.1%.
• Other BEV producers in China, which cooperated in the investigation but have not been sampled: 21%.
• All other BEV producers in China which did not cooperate in the investigation: 38.1%.

?? China's footprint in the EU's electric vehicle market is so far questionable: with an 8% share in 2023 for Chinese OEMs, the trend is indeed growing but is far from a tidal wave, and Made in China cars were amounting to a fifth of all European sales last year, stagnating for the 3rd year in a row: Tesla, Dacia (Renault) and BMW are amongst the Western carmakers importing Chinese-made cars into the EU.

???? Germany stands at the forefront of the opposition to these tariffs, fearing possible retaliatory actions from China that could impact its own automobile exports. Countries such as Sweden and Hungary share these concerns, an obvious reaction considering the Hungarian ties with China (Hungary will also welcome BYD’s first EU factory, so they’re certainly not really that adamant towards those tariffs).

?? China has indeed promised to retaliate if the tariffs are implemented, potentially by imposing its own tariffs on European electric vehicles. This rising tension threatens to disrupt the trade relations between the EU and China.

?????The winners of these tariffs are probably the French carmakers, less exposed to the Chinese market, and even more Stellantis as, while Renault will have headaches to keep its China-made Dacia Spring competitive, the Dutch-headquartered group has already bet on Eastern Europe for its affordable EVs.

???It is expected that most of the tariffs will be absorbed by Chinese carmakers, inducing a direct hit on their profitability. To be noted: hybrids vehicles are not impacted, keeping the opportunities wide open for the likes of BYD and SAIC (MG) and their plethoric offer of affordable hybrids.

?? Again, the dilemma remains: protect the EU industry and accelerate the EV transition certainly don’t go hand in hand. And the EV manufacturing gravity center in EU inching towards more China-opened Eastern European countries may just be a catalyst to more internal issues in the Union. But the announcement seems more like the start of a discussion with China than a definitive decision. How much it could influence the final results of the inquiry is yet to be seen though.

?? Some reactions and interesting opinions:

• Lin Jian (Chinese Foreign Ministry Spokesperson): “We urge the EU to listen carefully to the objective and rational voices from all walks of life, immediately correct its wrong practices, stop politicising economic and trade issues, and properly handle economic and trade frictions through dialogue and consultation” Link
• Matthias Schmidt (Schmidt Automotive Research): “A potential overlooked issue for Chinese OEMs is that the market for electric cars in Europe is fairly tepid […], for various reasons, and those in the market for an electric car required to pay the premium for that pleasure, don't necessarily want to pay the premium and then end up sat behind the steering wheel with a Chinese brand glued to it, with little brand equity. […] With higher tariffs[…] resulting in less pricing manoeuvring for Sino brands, our forecast to 2030, which factored in a tariff rise, sees Chinese OEMs' share of the West European BEV market peaking at below 12% from the just below 10% share it commands currently.” Link
• Volker Wissing (German Transport Minister): “The EU Commission's punitive tariffs are hitting German companies and their top products. Vehicles must become cheaper through more competition, open markets and significantly better location conditions in the EU, not through trade wars and market compartmentalisation.” Link
• PFA - Plateforme automobile (French car lobby): “The EU market is the most open in the world. However, in the context of the historic transformation it is facing, the sector has never been more in need of a level playing field: competition, yes, but fair competition.” Link
• Cui Dongshu (CPCA Secretary General, Chinese car association): “The EU's provisional tariffs come basically within our expectations, which won't have much of an impact on the majority of Chinese firms.” Link

As an interlude, and most and foremost as car enthusiasts, we must tip our hats to Ferrari for an hectic 2nd-win in a row at the 24 Hours of Le Mans ( Automobile Club de l'Ouest ), and more widely to all its contestants for a majestic edition filled with suspense. An exciting true kickstart for the hypercar era that showcases how the automotive world transcends mere industry, so special thanks to all the carmakers playing the (beautiful) game : Peugeot , Alpine , 宝马 , Automobili Lamborghini S.p.A. , Isotta Fraschini Motori , Cadillac , Porsche AG and of course TOYOTA GAZOO Racing Europe .

Kudos also to United Autosports for its LMP2 win, and Manthey-Racing GmbH for its GT3 win!

?? This Week In The Mobility World

???Factories/Manufacturing Updates

• HORSE partnered with WEG , a Brazilian electronics manufacturer, to develop a Range Extender system for commercial vehicles. WEG will supply key components like generators and inverters, while HORSE will design the system and provide its HR10 engine. This partnership will allow HORSE to obtain a reliable supply of parts for its Range Extenders, which are designed to improve fuel efficiency and reduce emissions for commercial vehicles.

???Micromobility Updates

• India’s EV moped manufacturer Ola Electric is prepping for an IPO , as Reuters reports the company received regulatory approval for a $660M IPO on Indian stock exchanges.
• Voi Technology is threatening London that it may remove its scooters from the city due to regulations it considers as too “heavy”: while e-scooters are regulated through quotas, it’s not the case for e-bikes, triggering what could be interpreted as unfair competition. Voi is then considering stopping its e-scooter activity in the city, and potentially entering the e-bike market instead.

???Tech Updates

• Tesla is recalling over 5,800 imported EV in China due to a software glitch that disables the driver's seat belt reminder. The faulty software will be, once again, fixed with a free OTA for most vehicles. This is Tesla's second recall in China this year, following previous recalls for software issues with the reverse camera and automatic steering assist.
• Tesla who is reportedly hiring back but only for AI and robotics domains, while some investors are suing Musk for “diverting carmaker’s resources to xAI”.
• Chinese AV start-up Momenta officialised the opening of its Japanese offices back in March, a move certainly linked with its strategic partnership tied with Toyota 4 years ago.
• Still a Chinese AV start-up, but this time it’s Volkswagen’s CARIAD partner 地平线 who updates its timeline for its SuperDrive AD solution (urban, highway and parking L2+ system): supply deals to be tied in Q2 with OEMs and OES and by Q4 2024 is expected mass-production readiness for the system.
• Meanwhile GM is finally re-financing Cruise after the AV start-up bumpy ride in late 2023. Cruise gets $850M from the carmaker as it quietly continues its testing comeback with Houston being added last week amongst the test-cities list with Dallas and Phoenix. If GM still trust in Cruise, it however doesn’t think it should keep funding it alone, as this lifeline comes “until [they] can find the right long-term capital efficient strategy, including potential new partnerships and external funding”, according to GM’s spokesperson Tiffany Testo.
• Suzuki Motor Corporation is investing $50M in Japanese AV start-up TIER IV , who’s working on bringing AV technologies into minicars. Already funded by Isuzu and Yamaha, the company’s approach differs from many by relying on an open-source AV operating system called “Autoware”.
• Why be stubborn with sat nav while consumers plebiscite phone mirroring in their cars? That’s the point of view of Ferrari who decided to ditch the tech . But honestly, who buys a Ferrari for its in-car navigation system?

?? EV Updates

• According to TechCrunch , Ford keeps building its large, secretive team focused on developing a low-cost EV platform. This team has grown to around 300 employees in the past year, poaching talent from competitors like Rivian, Tesla, Lucid Motors, and even Apple's disbanded EV project. Ford seems to be strategically targeting engineers with experience in cost-cutting techniques and efficient manufacturing processes, suggesting a serious effort to compete with affordable EVs from Tesla and China.
• A first controversy for Renault/Mobilize vehicle-to-grid technology that will be inaugurated with the Renault 5: Bertrand Moreau identified in Mobilize’s service conditions that homes equipped with solar panels won’t be able to recharge their car in the day time to power their house from their car by night, hence forbidding any self-sufficiency usecase for these users. Just a hiccup to be fixed post-launch, or the testimony of a service built around the concept of electricity resale (not reuse) and tightly linked with an energy provider (subscription mandatory to the Mobilize energy provider, powered by The Mobility House)?

???New Car Updates

• Fiat is celebrating its 125th anniversary with the announcement of the new Grande Panda ! The Grande Panda is the first of a new lineup based on a single platform that will be available in electric and hybrid versions. Designed in Italy, the car is under 4m long and can lodge up to 5 people. This marks the beginning of FIAT's transition to global platforms and a new wave of vehicle launches every year until 2027. However, its lineage with the new Citro?n C3 is even more obvious than with its other sister the Jeep Avenger

• Alpine has unveiled the A290, an electric city car with sporty flair, at Le Mans. Built on the Renault 5 platform, the A290 features a bold design, a driver-centric interior with heritage touches, and two electric motor options delivering up to 220hp and a 0-100 km/h time of 6.4 seconds. It also includes advanced tech like a customizable digital display, a telemetry app (shoutout to the guys behind it!), and fast charging. While some may find the acceleration slower than expected for an Alpine (0.3s slower 0-100kph than the entry Model 3 only €1k more expensive) and looks too close to the Renault 5, the A290 remains a compelling option for those seeking a fun and dynamic electric car with a sporty flair that goes beyond drag races

• 比亚迪 's Fang Cheng Bao sub-brand revealed official images of its Bao 3 electric SUV, following the release of key specifications in a Chinese regulatory filing. The Bao 3, measuring nearly 19 feet (5.8m) long and available in three colors, boasts dual electric motors for a top speed of 200kmph.

• Oh and by the way, Musk is now claiming that the eternal “next-year” Roadster will be able to fly. Do whatever you want with this information.

?? EV Charging Infrastructure

• The French Competition Authority has released its recommendations on EV charging infrastructure, emphasizing the need for a coherent national network and improved tariff transparency. Key suggestions include enhanced public support for less dense areas, better pricing transparency, and measures to foster competition among charging operators.
• NIO蔚来 is partnering with solar panel company Astronergy Solar to explore integrating solar power into its network of battery swap stations. This collaboration could lead to NIO installing solar panels on its stations, potentially turning them into mini power plants, similar to a previous partnership with Unisun Energy.

?? Marketing / Distribution Updates

• Ford is “sunsetting” its EV dealership program that required heavy investments from dealers to sell EVs in the US, amidst slower sales than expected at the launch of the program. All dealers will now be eligible to EV sales from now on.

???Investment/Financial/Legal Updates

• During Stellantis' Investor Day in Michigan, CEO Carlos Tavares detailed nine strategic differentiators and confirmed 2024 financial forecasts, including a double-digit adjusted operating income margin and positive industrial free cash flow. Despite 2024 being a transitional year with significant U.S. investments in EV, the company reassured investors with a €7.7B plan for dividends and share buybacks. Stellantis also aims to improve second-half results through new product launches and cost-cutting, while revising its capital management to target 25-30% liquidity of revenues and increase dividend distribution to 25-30% by 2025. However, investors seem worried (-11.14% YTD), is this due to the economic and political situation on the Old Continent? Time will tell.
• Despite shareholder lawsuits and a Delaware court challenge, Tesla shareholders approved Elon Musk's massive pay package and the company's move to Texas, a state seen as more friendly to Musk's interests.

See you next week and don't forget to share and subscribe to the newsletter!