July 5 marks the first day of the EU imposing additional tariffs on Chinese EVs imported into the zone. These are in addition to 10% tariffs that already existed. Both Nio and Xpeng cooperated with the EU investigation but did not receive an individual tariff and are so subject to the 20.8% tariff levied on such companies. The initial response of both companies seems to be business as usual with no changes. However, this may change as Xpeng is investigating the possibility of producing in Europe. The tariffs which commenced today, and are slightly lower than originally expected, are meant to be a temporary measure until final tariffs are implemented in November 2024.
Nio said that it will maintain its pricing strategy in Europe and reevaluate it according to the progress of the tariff policy. Earlier this year in the first quarter 2024 earnings conference William Li, Nio’s CEO, said that Europe accounted for a relatively low proportion of overall sales for Nio and so the tariffs would have little impact on Nio’s operations in the short term. In the long term, Nio will formulate a reasonable strategy according to the adjustments of the tariff policy.
Xpeng on the other hand has only promised to honor current customers waiting for deliveries and customers who have placed orders before the new tariffs came into effect, not subjecting them to any price increases. Furthermore, Xpeng is evaluating the feasibility of establishing a manufacturing base in Europe.
Under the temporary tariffs which came into effect on July 5, SAIC and companies that did not cooperate in the investigation will be subject to a tariff of 37.6%. BYD is subject to 17.4% and Geely 19.9% while for the other companies who cooperated with the investigation, they are subject to a 20.8% tariff on the import to the EU of all EVs. The EU intends to have a final policy ready by November 2024.
Nio’s cumulative sales in the European market in 2023 were 2,399 cars. Currently, Nio has 43 battery swapping stations and 45 supercharging piles across the region, although purchasers have access to more than 600,000 third-party chargers. Currently in Europe, Nio sells the ET7, ET5, EL6, EL7, ET5T and recently introduced the EL8. The EL8, known in China as the Nio ES8, was recently officially launched in Norway, Germany, the Netherlands, Sweden and Denmark. The price is significantly more expensive than in China with the 75 kWh version of the Nio EL8 being sold in Germany for 94,900 Euro (102,700 USD) compared with 498,000 yuan (68,500 USD) in China (see specs).
Xpeng officially entered the German market in March this year with the Xpeng G9 and P7. The company also sells in Scandinavia and France with plans to enter markets including Italy and the UK. Xpeng aims to achieve a 3% market share within the German new energy vehicle market by the end of this year and it has 12 local dealers with 24 retail locations within Germany.
Both Nio and Xpeng are also expanding outside Europe with both recently trying to enter the UAE market. Xpeng, in addition, is expanding into Southeast Asian markets and some other Middle Eastern markets.
Sources: Autohome, Fast Technology, Autohome
