BYD and NIO face tariffs as Europe mandates durable EV batteries and range monitoring

Faced with a veritable onslaught of Chinese electric car brands like BYD, NIO, or XPeng, the European Commission is eyeing an anti-dumping and anti-subsidy investigation, report Brussels sources. NIO and XPeng have been making inroads in many European countries for a good while now, and recently Tesla's biggest competitor BYD also entered the fray, aiming to introduce its full portfolio of electric vehicles to the common market. 

Despite that the popular BYD Atto 3 SUV, for instance, costs more than twice as much in Europe as it does in China, it is still somewhat cheaper than equivalent EVs made by local brands like Volkswagen. According to one study, European automakers will be losing €7 billion in profits each and every year in which Chinese EV brands are allowed to the common market without any type of tariff.

The European Commissioner Thierry Breton, who is in charge of the internal market, has commented that he would be "very much in favor of opening a dumping investigation into electric cars as soon as possible" since "the rapid increase in imports has become a problem for EU industry." Germany, on the other hand, has been on the fence about placing import barriers before Chinese electric cars since its own carmakers could suffer from reciprocal tariffs.

Faced with the increasing likelihood of Chinese takeover of the European EV market for electric vehicles at the expense of local automakers whose production costs are much higher, even Germany is warming up to the idea, so the first set of anti-dumping investigations could be out as soon as July 12, report insiders.

Meanwhile, the European Parliament ratified the amendments to the newest EURO 7 emissions standard regulations, which contain new rules for a circular EV battery industry. Those include requirements for sustainable production and recycling, as well as for basic standards of battery pack longevity:

Vehicles with traction batteries, including plugin hybrids and battery electric vehicles, produce lower exhaust emissions but much higher non-exhaust emissions when their entire value chain is taken into account. In order to gain and increase consumer trust in such vehicles, they should be performant and durable. It is therefore important to require that traction batteries retain a good part of their initial capacity after many years of use. That is of particular importance to buyers of second hand electric vehicles to ensure that the vehicle will continue to perform as expected. will continue to perform as expected. Monitors of the battery state of certified energy (SOCE) and state of certified range (SOCR) should therefore be required for all vehicles that use traction batteries. In addition minimum performance requirements for battery durability of passenger cars should be introduced, taking into account the UN Global Technical Regulation 22.

The requirement for monitoring the state of certified range would be of particular importance for the market of used electric vehicles of which there will be plenty just five years from now. Moreover, in the eight years after enforcing these regulations, companies should have prepared to input a mandated amount of recycled lithium, nickel, or expensive cobalt, in their new EV battery packs.

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