In October last year, the European Union (EU) imposed additional tariffs on Chinese electric vehicles, leading to a sharp decline in sales of Chinese electric vehicle manufacturers in Europe. This appears to be due to a substantial increase in prices resulting from the tariffs, causing a loss of competitiveness. As sales of Chinese electric vehicles falter, South Korean corporations are expected to gain a windfall.
On the 19th, according to the German market research firm Jato Dynamics, the MG4, a small electric sport utility vehicle (SUV) owned by the Shanghai Automotive Industry Corporation (SAIC), sold a total of 51,775 units in Europe, including the UK, last year. This is a 28% decrease compared to 2023.
The decline in MG4 sales appears to be significantly impacted by the EU's additional tariffs. SAIC is subjected to a total tariff rate of 45.3% from the EU. Before the tariffs were implemented, the price of the MG4 was approximately €31,000 (about 46.63 million won), but it now starts at €34,990 (about 52.64 million won). Although this vehicle was produced cheaply in China and exported to Europe, the introduction of tariffs has eroded its price competitiveness. The equivalent model, the Volkswagen ID.3, starts at €33,330 (50.31 million won) and sold 54,531 units last year.
Geely Automobile Group's Lynk & Co also experienced a sharp decline in sales. Lynk & Co's small SUV 01 saw sales in Europe and the UK fall to just 5,961 units last year, a 73% decrease from 22,072 units in 2023. Lynk & Co is a premium brand created through a joint venture between Geely Group and Sweden's Volvo Cars, and an additional 18.8% has been added to the existing 10% tariff.
BYD, China's largest automobile manufacturer, sold 50,265 units in Europe last year, a 216% increase from the previous year. This appears to be due to significant price reductions. The starting price of BYD's electric vehicle Atto 3 was €40,000 (about 60.19 million won) in 2023, but it has been lowered to €37,990. A 17% additional tariff is applied to BYD's electric vehicles on top of the existing 10%.
The automobile industry believes that South Korean corporations will benefit from the tariffs imposed on Chinese electric vehicles. South Korean electric vehicles are exempt from tariffs under the Free Trade Agreement (FTA) between Korea and the EU. The starting price of Kia's small electric SUV EV3 is €35,990, making it cheaper than BYD's Atto 3.
Last year, Hyundai Motor and Kia's sales in the European market were 528,586 units and 526,775 units, respectively, ranking 10th and 11th overall. Their combined sales (1,055,361 units) were the second highest, following Volkswagen (1,354,996 units).
An automobile industry official said, "The amount shipped from Korea to Europe at the end of last year began to be sold from the beginning of this year. In the short term, we can expect a windfall from the tariffs imposed on Chinese electric vehicles."