that lay ahead, and in July his old employer Renault announced that it wanted to cut EV production costs by 40 percent. The EU claims Chinese EVs now account for 8 percent of the European EV market, a figure that could almost double by 2025. It’s not hard to understand why when the critically acclaimed MG4 is available for more than €10,000 less than its VW ID.4 rival.
The threat is bigger in Europe than in the U.S. where Chinese cars already face high import duties, though brands such as Geely-owned Volvo are able to offset these against credits earned from vehicles they export from U.S.-based factories. Europe is also mindful of how its own solar industry was wiped out a decade ago by cheap panels coming in from China, but at the same time some in the auto industry think the EU needs to tread carefully in case of retaliation by Chinese authorities.
Western carmakers rely on the Chinese market for a large chunk of their revenue and if China fires back with tariffs of its own, that revenue could be badly affected. And that’s not the only danger Western brands face. Ironically, EU tariffs could potentially hurt those Western brands too, because automakers including Tesla, Renault and