the threat of new European customs duties worries Chinese electric car factories

If the European Commission’s decision announced for Wednesday June 5 could ultimately be postponed until after the elections, a possible increase in customs tariffs is already irritating China, which denounces a politicization of the economy.

Should Europe impose new customs duties on Chinese electric cars which are preparing to invade the European market? This is one of the themes of the electoral campaign before the European elections on June 9. The question is still not resolved. The decision of the European Commission announced for Wednesday June 5 could ultimately be postponed until after the elections. In China , in any case, the prospect of new customs duties is of great concern to electric car manufacturers.

This is the case of Leapmotor, the third Chinese start-up in new energy vehicles. It will export its first cars to France in September, thanks to a partnership concluded with the Italian-French-American group Stellantis. For several weeks, the Leapmotor assembly plant in the Jinhua suburb south of Shanghai has been in full swing.

The approximately 6,000 workers and the numerous robots surrounding them are preparing the very first cars which will soon leave for Europe. “The car you see there is the T03 model that we are going to sell from September in nine European countries, introduces Tan Xuegang, the team leader of the assembly workshop. We have adjusted all the software, especially the language system. We also had to meet local regulations for our vehicles to be certified in each country.”

The T03 is a small entry-level car that will be sold for less than 20,000 euros in Europe. Leapmotor also plans to export a family car model. To prepare for this deadline, the factory’s production rate has been increased: currently, 800 vehicles come off the production lines every day. The manufacturer has the particularity of manufacturing everything for its cars, from engines to batteries to gearboxes.

The 120-hectare site is one of the most sophisticated in China, with a total of three factories and a fourth planned to be built in the provincial capital of Hangzhou. “The automation rate of our factory is around 90%, explains Tan Xuegang. Workers only carry out assembly and inspection work. The batteries are also manufactured here in a factory next door, they are then transported here to the assembly site.”

These cars which are going to be exported are a condition of survival for Leapmotor: the Chinese market is saturated. The CEO and founder of Leapmotor, Zhu Mingjiang is battling against a hundred competing manufacturers: “It hasn’t been easy for us to get this far. In 2015, there were more than 50 start-ups in China in the field of new energy vehicles. Now, there are only five left, including us, Leapmotor, which still exists The competition is brutal The domestic market is no longer enough to survive And in this context, globalization is very important for us. This is why we launched this collaboration with Stellantis to develop our foreign markets.he pleads.

Thanks to the alliance with Stellantis, Leapmotor will be able to benefit from a network of 200 dealers in France. For independent automotive expert Li Yanwei, this type of partnership is essential for the Chinese: “Many Chinese manufacturers have created their own independent companies in Europe to sell cars there. They are gradually trying to understand the market and the behavior of local consumers. But it is moving slowly. Thanks to Stellantis, Leapmotor will not have all this work to do. Stellantis will constantly provide information on market developments and improvements to be made to products to meet the needs of European consumers.

“By working together, both companies will be able to penetrate the European market much more quickly.”

Li Yanwei, automobile expert

at franceinfo

The alliance with Stellantis is also a way of anticipating an increase in customs duties in Europe, according to Grégoire Olivier, representative of Stellantis in China: “If the European Commission decides on high levels of import taxes in Europe, this will logically lead us to locate Leapmotor vehicles in a Stellantis factory in Europe.”

The European Commission’s decision has not yet been announced, but a possible increase in customs tariffs is already irritating China, which denounces a politicization of the economy. This is also what Leapmotor boss Zhu Mingjiang also said half-heartedly: “I think that reasonable customs duties are normal. It’s a way of protecting local businesses, but setting customs duties too high is not commercial behavior, there are other factors who play.”

“At a time when the United States and the European Union want to increase customs duties on Chinese exports of electric vehicles, continues the boss of Leapmotor, We hope that this type of cooperation with Stellantis will allow us to circumvent these barriers and keep our products competitive.” Thanks to Stellantis, cars manufactured in the Jinhua factory will also be sold from the end of the year in many other countries: in South America, the Middle East, Asia and the Pacific. . but not in the United States for the moment. Washington is considered too hostile to Chinese electric vehicles.