Chinese EVs sell out in 24 hours as EU weighs 40% tariffs

Chinese EVs sell out in 24 hours as the EU weighs 40% tariffs

Chinese electric vehicles have evolved from obscure budget options to high-demand products. The Xiaomi sold out within 24 hours, while the Huawei Luxeed S7 and Avatr 12 offer competitive pricing. With the Avatr 12 starting at €39,480, the debate shifts from market loss to defensive strategies.

The Chinese EV that sold out in 24 hours

Xiaomi achieved what Apple failed to do: launch its own car. Demand overwhelmed production capacity within a day, contrasting sharply with Apple’s cancelled project and Elon Musk’s delayed budget model. The Avatr 12 offers three versions, with the entry-level priced at 308,000 yuan. This enthusiasm must be tempered by the fact that these are Chinese catalog prices, excluding European fiscal and logistical costs. European brands still retain loyalty in the mid-to-high-end segment.

Why a Tesla sold in Europe comes from Shanghai?

Many Teslas registered in Europe are manufactured in Shanghai, effectively Chinese-built cars with an American logo. The Model Y was Europe’s best-selling vehicle in September, according to Dataforce. However, Tesla’s annual European sales lag behind Volkswagen’s Golf alone. Meanwhile, Volkswagen sells 2.2 million cars annually in China, nearing Germany’s total. Closing this market would be self-sabotage for European automakers.

40% tariffs: the wall Europe is studying

Consultancy Rhodium Group suggests a tariff of between 40% and 50% is needed to curb Chinese EV imports. Current rates hover around 11% CIF, with scenarios reaching 20%, still failing to match real cost differences. The paradox remains: if Chinese EVs threaten European industry, why not US cars? Chinese cars are largely excluded from the US market, and Huawei faces similar barriers. The wall exists; it is simply erected earlier elsewhere.

What China sells abroad and buys domestically

One analysis argues the Chinese model relies on exports, with BYD making more profit outside China than within. Another view notes that Chinese streets are filled with Chinese cars, while foreign brands like Volkswagen or Toyota represent older models. Those who can afford it still buy Audi or Mercedes, and Apple led China’s smartphone market in 2023, according to IDC.

The Japanese precedent: the 1985 Plaza Accord

On September 22, 1985, France, Germany, Japan, the UK, and the US met in New York. Washington threatened tariffs unless currencies revalued. They agreed, leading to Japan’s subsequent economic stagnation. The question is whether this can be repeated with China. The answer is no: China is sovereign and not dependent on Washington’s goodwill to sustain its currency. The West can delay, but not prevent, their entry.

Is the electric car a farce and hydrogen the way out?

Doubts persist about a fully electric fleet lacking charging infrastructure, battery materials, and recycling solutions. Some argue hydrogen and synthetic fuels are the answer. Technically, fuel cells are costlier than electric motors, and hydrogen requires high-pressure handling. While Formula E exists, hydrogen remains experimental. The only open arena is synthetic fuels.

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No one knows when the tariff wall will be fully erected or if it will matter. Europe’s automotive advantage no longer rests on quality but on the ability to impose barriers. And barriers, unlike engines, are copied in two afternoons.