China carmakers told to halt investment in EU nations backing EV tariffs

China has told its carmakers to halt big investment in European countries that support extra tariffs on Chinese-built electric vehicles (EVs), two people briefed about the matter said, a move likely to further divide Europe.

The new European Union tariffs of up to 45.3 per cent came into effect on Oct 30 after a yearlong anti-subsidy probe into EV imports from China that divided the bloc and prompted retaliation from Beijing. Ten EU members, including France, Poland and Italy, supported tariffs in a vote in October, in which five members, including Germany, opposed them and 12 abstained.

Chinese carmakers, including BYD, SAIC and Geely, were told at a meeting held by the Ministry of Commerce on Oct 10 that they should pause their heavy-asset investment plans, such as for factories, in countries that backed the proposal, said the sources.