A 100% tariff rate on Chinese electric vehicles (EVs), first announced by Biden in May, went into effect Friday. 

The tariff also puts a 25% on EV batteries, critical minerals, steel, aluminum and ship-to-shore cranes, among other items, according to documents filed by the U.S. Trade Representative. 

Multiple media sources have claimed the tariff on EVs is meant to ease concerns about China’s low-cost EVs. 

Stellantis CEO Carlos Tavares has made headlines after telling Reuters the tariffs a “trap.” He told the news outlet it hurts automakers to shield them from the reality that Chinese rivals make electric vehicles for about a third less. 

“The best way to compete is instead to ‘try to be Chinese ourselves,’ Tavares said at a Reuters Events conference in Munich in May,” according to the article. 

Stellantis purchased a 21% stake in China EV maker Leapmotor, the article says. This created a joint venture, which gave Stellantis access to Leapmoter technology and rights to produce its EV outside of China. 

“The challenges faced by Stellantis in the EU and the U.S. are no different than those confronting all automakers as they seek to compete with the Chinese globally,” the article says. “However, Stellantis and a handful of others have taken it a step further, establishing partnerships with Chinese automakers in order to stay competitive.”

The company is currently making a Leapmotor EV at its Tychy Plant in Poland, the article says. It says Chinese EVs are already on sale in Europe. 

“Stellantis could theoretically produce Leapmotor EVs at U.S. plants, but with non-Chinese parts and U.S. wages any savings could be minimal,” the article says. “The real problem for Stellantis would be political.”

The article says BMW CEO Oliver Zipse also says a trade war would hurt Europe. 

“There is no Green Deal in Europe without resources from China,” Reuters reports Zipse as saying in May.

While other automakers, such as Ford have said the tariffs help put the U.S. on a level playing field. 

The European Union has been in talks with China in recent days that could result in the avoidance of tariffs placed on Chinese EVs, according to Politico. 

This includes the possibility of setting voluntary minimum prices that would offset Chinese subsidies used by Chinese OEMs when manufacturing EVs. 

“One official described the concept as a “surcharge“ that would balance out the Chinese state aid,” Politico reports. 

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Chinese manufacturers of electric vehicles and components exhibiting at Automechanika Frankfurt September 2024/Repairer Driven News