October 16, 2024 – Reuters reported that on the 15th local time, Stellantis CEO Carlos Tavares issued a warning: the tariffs imposed by the European Union (EU) on Chinese electric vehicles (EVs) would accelerate the closure of local automobile manufacturing plants in Europe.
In Tavares’s view, imposing tariffs on Chinese EVs would compel Chinese automakers to set up factories in Europe. While tariffs can be an “effective communication tool,” they also bring undesired side effects. “It exacerbates the problem of overcapacity in European manufacturing. The way to avoid tariffs is to set up factories in Europe, which will speed up the process of plant closures.”
The report suggested that under certain conditions, Chinese companies could circumvent the newly implemented EU tariffs by choosing to produce EVs in Europe.
During an interview with Italian media, Tavares also mentioned that European governments, including Italy, are attempting to attract Asian automakers to invest locally, despite the likelihood of them preferring Eastern Europe as a production base. For instance, BYD is currently establishing its first European assembly plant in Hungary.
Furthermore, Tavares elaborated, “Chinese automakers won’t choose to build factories in Germany, France, or Italy due to cost disadvantages, especially high energy costs.”
The Italian government and Stellantis have disagreed over the latter’s declining production in Italy. However, Rome indicated that it is negotiating manufacturing investments with several Asian automakers, including China’s Dongfeng and Chery Automobile.
