The market presence of Chinese electric vehicles (EVs) in Europe saw a reduction last month following the implementation of increased tariffs by the European Union (EU).

In July, Chinese vehicles represented 9.9 percent of electric vehicle registrations in Europe, a drop from 10.2 percent the same period last year, as reported by Dataforce, a renowned automotive analytics firm.

This downturn coincides with the EU’s introduction of provisional duties on July 5, which escalated import tariffs for Chinese EV manufacturers to between 17.4 percent and 37.6 percent, in addition to the existing 10 percent duty applied to all car imports. These tariffs are anticipated to become permanent in November, contingent upon approval from EU member states.

In July, registrations of electric vehicles from Chinese manufacturers fell to below 14,000, a significant decrease from approximately 23,000 in June.

The tariff increase follows an investigation by the European Commission into alleged “unfair subsidisation,” which suggested that Chinese EVs were being sold at lower prices than their European counterparts due to state support. The Commission’s analysis considered the extent of government aid received by the manufacturers and their cooperation during the investigation.

Notable manufacturers such as BYD, which briefly surpassed Tesla as the largest electric vehicle producer globally last year, now faces a tariff of 17 percent, while SAIC Motor, which owns the MG brand, is subjected to a 36.3 percent tariff. Conversely, Tesla, based in California and led by Elon Musk, manages to avoid the steepest tariffs with a 9 percent duty applied.

China has rejected the allegations put forth by the Commission, resulting in increased trade tensions between the two regions. Recently, China’s commerce ministry accused European companies of selling brandy at “dumping” rates ranging from 30.6 percent to 39 percent margins, asserting that while its domestic industries have faced harm, it would refrain from imposing provisional tariffs at the present time.

Last month, UK politician Rachel Reeves discussed the importance of trade with China, expressing that the UK government was not likely to impose punitive tariffs on imports from the country. This follows the United States’ implementation of a 100 percent tariff on Chinese-made electric vehicles back in May, with Canada announcing similar plans recently.

In her statements, Reeves emphasized, “We are a small, open trading economy and we benefit from those trade links with countries around the world, both for exports and imports, as well as for foreign direct investment. We aim to promote trade, cooperation, and challenge where necessary, while ensuring the UK economy remains open to imports and exports, particularly from China.”

The overall demand for electric vehicles has been on a downward trend in Europe, significantly influenced by Germany’s premature conclusion of its subsidy program last December. In Germany, electric vehicle sales experienced a month-on-month drop of 37 percent in July, reflecting a 20 percent decline from the previous year, according to the European Automobile Manufacturers’ Association.

Dataforce’s analysis, focused on battery-electric unit sales across the EU, the European Free Trade Association, and the UK, indicated that Chinese-made electric vehicles constituted 11 percent of registrations in Britain last month, down from 17 percent in July 2023. However, there was a month-on-month increase in market share in the UK and the Netherlands, both attaining an 11 percent share in July, up from 9 percent and 7 percent respectively in June.

The Netherlands and Belgium emerged as the only European markets to show a year-on-year rise in the market share of Chinese-assembled electric vehicles.