Chinese EV makers continue aggressive push into Europe under growing threat of tariffs

PARIS — Chinese electric carmakers are expanding into Europe even as politicians raise the possibility of high tariffs on vehicles from the world’s second-largest economy.

Nio opened a showroom in Amsterdam this week, and Xpeng launched its G9 and G6 sports utility vehicles in France last week. Xpeng also had a car on display at the VivaTech conference in Paris, and BYD likewise showed off one of its vehicles.

The public marketing efforts come amid an ongoing investigation by the European Commission, the European Union’s executive arm, into subsidies given to electric vehicle makers in China. The result of this probe could lead to tariffs on Chinese EV imports.

The U.S. has already taken such a step, with the Biden administration imposing 100% tariffs on Chinese EV imports.

Chinese EV makers have been aggressively expanding overseas, as they look to challenge Elon Musk’s Tesla internationally but also to gain an early lead ahead of established automakers.

Companies like BYD have raised concerns about the cutthroat pricing of vehicles. BYD has a car called the Seagull, a small all-electric hatchback that starts at just 69,800 yuan, or less than $10,000. Chinese firms’ ability to launch cheap cars could heap pressure on established automakers, which may not be able to match the discounted pricing.

China’s EV industry has boomed over the years thanks to incentives and support from the Chinese government, which has concerned politicians in Europe and the U.S.

When CNBC asked about potential EU tariffs this week, French Finance Minister Bruno Le Maire did not confirm that such measures are on the way. But he said his goal is to “protect our industry and to ensure that on the international stage, there is a level playing field.”

Not all EV players welcome the tariffs, however, with Tesla’s Musk saying he’s not in favor of tariffs on Chinese electric vehicles.

“Neither Tesla nor I asked for these tariffs,” Musk said in response to an inquiry from CNBC’s Karen Tso during a Q-and-A session at the VivaTech conference on Thursday.

“In fact, I was surprised when they were announced,” he added, referencing the U.S.’s 100% import tax.

Earlier this year, Musk had warned that Chinese EV players would “demolish” competitors abroad in the absence of trade barriers.