As the European Union finalizes its investigation into China’s electric vehicle (EV) sector, firms could counter the impact by establishing production facilities in countries like Turkey, Serbia, and Hungary. Analysts caution that the EU may respond with stricter measures in reaction to Chinese EV makers attempting to bypass high import tariffs.
Chinese EV manufacturers are advised to follow the Japanese model of setting up manufacturing plants in the US in response to potential EU tariffs. Amid speculation about the EU’s investigation outcomes and possible tariffs, BYD, China’s leading EV maker, has planned to build its first passenger car facility in Hungary, highlighting the growing interest in European production operations.
The EU may take action against trade regulations’ circumvention by Chinese firms, potentially complicating compliance and costs. Turkey, with its Customs Union with the EU, presents itself as a strategic entry point for Chinese companies into the European market. By investing in Hungary and Serbia, China aims to leverage its production capabilities to navigate the transition to green technology, aligning with the EU’s emission goals.
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