May 23 – China will slash import tariffs on certain vehicles to 15%, the Ministry of Finance (MOF) said on Tuesday May 22. Cuts will take effect on July 1.
This includes the current 25% tariff levied on 135 items and the 20% duty on four items.
Tariffs on 79 auto parts will fall to 6%, from current levels of 8-25%. Auto parts that will have lower import duties include car bumpers, doors and seat belts. The average tax on qualifying vehicles will be 13.8%.
These lower import tariffs are likely to weigh on domestic car manufacturers and battery suppliers, while benefiting the supply chain of foreign car companies such as Tesla, SMM believes.
SMM expects domestic ternary lithium battery (including NCA and NCM) producers to be more affected than producers of lithium-ion batteries, as ternary lithium batteries become increasingly mainstream in the international market for new-energy vehicles (NEVs).
Lithium-ion batteries dominate China’s electric car market, but its growth has slowed in recent years.
“China safeguards a multilateral trade system. Lowering auto import tariffs is a major step to expand reform and opening-up,” the MOF said.