Business · Trade · 10 hrs ago
EU quota and China tax rebate cut pressure Chinese carmakers
Chinese carmakers face new pressure on exports as the EU and China introduce measures affecting vehicle trade.
The EU and China reached an understanding that will see Brussels impose a quota on Chinese-made hybrid imports.
Separately, Beijing will cut the export VAT rebate for electric cars from 13% to 9% from April next year.
Chinese carmakers have relied on exports to offset falling sales at home.
The measures come as China’s domestic car market is declining, adding to financial strain on the country’s roughly 50 EV makers.
Analysts have lowered earnings forecasts, and some companies may face a critical test as the changes take effect.
China’s electric vehicle makers face export restrictions from the European Union and a cut to China’s export tax rebate.
The EU measure will impose a quota on imports of Chinese-made hybrid vehicles.
China will reduce the value-added tax rebate for electric car exports from 13 per cent to 9 per cent from April next year.
Analysts have lowered their earnings forecasts for the industry.
The measures come as sales decline in China’s domestic market, adding financial pressure on carmakers.
- Who
- Chinese electric vehicle makers, the Chinese government and the European Union.
- What
- The EU will impose a quota on imports of Chinese-made hybrid vehicles, while China will cut the export VAT rebate for electric cars.
- When
- The EU and China reached an understanding on Friday. China’s rebate cut takes effect in April next year.
- Where
- China and the European Union.
- Why
- The EU measure is part of a wider effort to reduce Europe’s trade deficit with China. The source does not state why China is cutting the rebate.
This story does not have two clearly opposing sides.
China and the European Union reached an understanding on trade that will see the EU impose a quota on imports of Chinese-made hybrid vehicles.
Beijing announced a cut to the export VAT rebate for electric cars from 13 per cent to 9 per cent, effective from April next year.
- EU measure
- Quota on imports of Chinese-made hybrid vehicles
- China rebate cut
- From 13 per cent to 9 per cent
- Effective date
- April next year
- Industry size
- About 50-odd EV makers in China
What people are saying
do-or-die moment