Will MG prices skyrocket?

MG is the big loser in the European Union’s project for additional tariffs against Chinese manufacturers.

Star of the year 2023, MG took a first hit with the loss of the Ecological Bonus. No problem, as the brand immediately offered generous discounts that allowed it to continue its triumphant march. But the blow that the European Union is preparing to deal to its parent company SAIC is likely to hurt much more!

The EU has announced that it intends to impose new tariffs on imports of Chinese electric vehicles. These taxes aim to counteract the excessive subsidies provided by the Chinese government to its automotive industry, which enable exported vehicles to be sold at prices lower than their global rivals. This follows a nine-month investigation into alleged unfair public subsidies to Chinese electric vehicles. Manufacturers were invited to plead their case, and while some like BYD chose transparency and emerged with a lesser penalty, others face a historic sanction.

To simplify, electric vehicle manufacturers who cooperated with the EU investigators will face tariffs of 17.4% to 21%, while those who did not will move to the higher level of 38.1%. These taxes are in addition to the 10% already applied.

MG faces a setback

MG’s parent company, the Chinese state group SAIC, faces the highest tariff at 38.1%. Geely, which holds a stake in Volvo, receives a 20% tariff. A 17.4% tax will be applied to the entire BYD range, including the new Dolphin and Seal U launched in the EU last year.

The percentage will not be applied directly to the catalog price, as it takes multiple factors into account. According to figures shared by the EU, a 17.1% rate will increase the cost of a base model car priced at 30,000 euros by 5,250 euros. A 38.1% rate will result in a price increase of 11,450 euros.

Thus at MG, the MG4 Standard is set to rise above the 40,000 euros mark while it is currently priced at 24,990 euros with the exceptional bonus of 5,000 euros granted until 29/06/2024. One can say that at this price, it loses all competitiveness against a Tesla Model Y manufactured in Europe and thus exempt from tariffs and even eligible for the Ecological Bonus! And what about the Marvel R that could approach 60,000 euros after deducting bonuses!

In theory, these new tariffs are set to be applied starting July 4. Chinese companies have until then to contest the EU’s findings and seek an adjustment of the border sanctions. Constrained and forced, SAIC will have to make an effort to save its flagship brand!

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