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XPeng P7 (EU Tariffs Discussion) - EV Hour
In this special episode of EV Hour, Magnus discusses the impact that the new tariffs imposed by the European Union on Chinese electric car manufacturers and the sorts of impact that will have on EVs across the continent.
Audio transcription
"This is the XPeng P7, and you've seen it two times before on this channel.
It was one of the first videos that I ever edited myself, and furthermore, I did a big revisit on it when I came back to these videos after the birth of my second son."
"The point is, we're not going to be talking about this much more.
It's great.
It looks fantastic, it turns heads when you drive it, it has wonderful characteristics, great range, it's one of my favorite cars on the road today, and XPeng is, furthermore, one of my favorite manufacturers."
"No, we're going to be talking about something which threatens manufacturers like XPeng on the European markets as we know them, because right now, it seems like there's going to be an enactment of a policy on the part of the European Union which feels like that Chinese manufactured and designed cars coming from, well, Chinese companies that have sort of bouldered in onto the European scene after the birth of the modern EV, well, they are getting an unfair competition advantage next to European brands such as Audi, BMW, Fiat."
"And the point is that they are going to put massive tariffs on cars like this, upwards of 38%.
Now, is that fair?
Well, that depends on the eye of the beholder, I guess."
"If you want to make European cars more attractive to European buyers, well, then putting tariffs on this will probably persuade some to move from something like this over into something more European-based.
But there's a couple of caveats to that, and that is what I hope I can convey in very broad terms in this video."
"So let's take a drive in the P7 and talk about it.
I hope that you're following me so far and that you can forgive the lack of sort of interior shots and talking about the car-specific features.
I assure you, there is really good material of the P7 specifically in other EV Hour episodes."
"This is more of a debate-y type offshoot of the series because I feel like this is going to have a drastic impact of the car market in the EU as we know it.
Now, why haven't XPeng specifically raised their prices?
Why are they assuring us, at least here in Denmark, that that won't happen?
Well, one pretty good theory is that it's going very well for XPeng."
"It's one of the few Chinese manufacturers which really has gotten a strong grip on at least the Danish consumer, and they have been belting out G9s and are set to do the same with the G6s.
But this will lessen competition."
"There will be fewer players in the market in just a few years' time if the full impact of these tariffs are set to go through.
Now, that will probably embolden the brands that we already know.
VW, Audi, BMW, Fiat, all of the European brands that operate within the EU and have done so for a long time."
"But not only do these brands also sell cars in China and would be really, well, it would be a bad situation for them if tariffs from China would impact them, but at the same time, in some regard, despite the fact that I'm not a free market kind of guy, less competition does mean higher prices and a worse experience for the consumer."
"It's a point that I'm going to continue to come back to in this video, and I find it disheartening, at least in its current state.
I am.
Now, I waited as long as I could recording the actual talking bits of this video, and the reason I did that is because I'm so afraid of getting the basic maths or the politics wrong."
"So, I'm not going to get too much into that.
What I will say is that I know that tariffs can be a very important tool for a number of different reasons, and that they have been utilized to great effect in order to create an even playing field out of what would otherwise be a pretty uneven one."
"However, in this particular case, I find it very hard to believe that this will basically strike at the heart at anything other than the actual consumer.
SAIC is one of the major car holding groups.
They're set to get hit by 38% Geely Group, which owns Volvo and Polestar, and they're not far behind."
"And again, as I said, NIO is considering this situation and looking at it very carefully, I would assume, which means that we could see them pull out altogether.
And while you might not be directly affected by NIO pulling out, or BYD, or whatever the case may be, we want more manufacturers."
"That was the dream of EV production, was that more cars would introduce more choice, and which would ultimately lower prices and create a better environment for consumers, ultimately.
Now, I'm not some pro-business dude.
I mean, I'm very sure that there are very good reasons, calculated reasons, why these tariffs might be in place."
"But as I've said from the beginning, if there's one thing that I would love to see happen, is that if the European Union wants more people to choose European alternatives to Chinese EVs, make those cars cheaper.
We've done that before."
"There are ways to create better buying conditions for consumers and still steer them in a particular direction.
But that's not happening.
Instead, it looks like all cars, both Chinese ones and probably also European ones, would just be more expensive."
"And I think that's a shame.
It's too early to say for certain how all of this will play out.
But it's unlike anything we've seen before, and I have my doubts, for now at the very least, that it has the intended effect of creating artificial interest in EU-based models from consumers."
"We need the competition to push prices down, and I'd much rather have seen the EU offer rebates or some other cost-saving measure.
Instead, this seems like its sole purpose is to make cars more expensive and scare away new competitors on the scene."
"It seems like this particular trade dispute, illegal Chinese government support or no, will just end up squeezing you and me.
Now Xpeng has, as one of the only Chinese brands where these tariffs come into play, said publicly and outright that it won't result in more expensive cars for the end user."
"And that applies to both this, the P7, the very, very popular G9, and the up-and-coming G6, which is slated to hit the markets very, very soon.
So that's good, I guess.
But other manufacturers like NIO, a company which I also quite like, and I think they have some good things going on, have said that they're monitoring the situation carefully, meaning that we could see some of these brands pull out completely, meaning ultimately a less competitive marketplace."
"So it leaves me with an odd feeling in my stomach, because I know what these tariffs are supposed to do.
Most EV brands present here in Denmark are at the very least following Xpeng's lead, such as BYD, Maxxis, NIO, Polestar, and Volvo, because they are owned by the Chinese."
"But Hongqi, on the other hand, are raising their prices, and other manufacturers have put EU launches on standby entirely.
This has massive ramifications for the rollout of new brands, new models, and sales of existing models, and FDM here in Denmark recommend that you consult them before purchasing one of these in the near future."
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