Anti-dumping duties on e-cars: What could China's response be?
Cheap electric cars imported from China are increasingly competing with European manufacturers. EU Commission President Ursula von der Leyen suspects unfair competition and is threatening the Middle Kingdom with tariffs. We can see how China likes to exert its power in such cases by looking at the export controls on germanium and gallium. The People’s Republic could extend these to rare earths at any time.
China has already displaced the German solar industry from the market
Despite this danger, action is required. China has already displaced German manufacturers from a market in which they were previously leaders, namely the production of solar modules in 2013. Then, as now, German industry could not compete against prices suppressed by China’s state subsidies. But are punitive tariffs on the end product the right way forward?
The German e-car industry fears foreign policy upheavals
Renowned car companies in Germany consider the tariffs to be counterproductive. The German automotive industry is not interested in a trade conflict with China, as the People’s Republic represents the largest sales market. Furthermore, car manufacturers such as BMW, Mercedes, and Volkswagen fear that China could, as already threatened, completely close the e-car market to Europe. That would also not be in the interest of consumers.
With export controls, China would keep all options open
In our view, it would be in the interest of neither car buyers nor their manufacturers if China were to introduce export controls on rare earths. Yet that is precisely what we believe to be the most likely reaction. This would allow the Middle Kingdom to send a clear signal while simultaneously keeping all options open. These range from brief export halts for individual rare earth metals to the complete cessation of deliveries of all rare earths.
Improving the EU as an industrial location starts with raw materials
In our view, to catch up with China, the European e-car industry does not need tariffs against China, but rather optimal production conditions. These begin with raw materials. Here, we Europeans should ensure independence and a healthy measure of protectionism or diversification. Know-how and skill have never been a problem for the German automotive industry; with the right raw materials, we can continue to build on them.
Up to three kilograms of rare earths per e-car
Up to three kilograms of rare earths are used in an average e-car. The e-car industry is therefore dependent on a constant supply of these production-critical metals. The press is currently reporting on our revolutionary new storage product, Noble Portfolio +finomet, which offers private buyers the opportunity for attractive tax-free returns and also secures their investment assets according to the latest technological standards.