| Thanks for reading Hyperdrive, Bloomberg's newsletter on the future of the auto world. Read today's featured story in full online here. European Union tariffs slowed the influx of Chinese-made electric vehicles in July, as the bloc moved to protect its automakers from low-cost competition. The number of new EVs that Chinese automakers including BYD and SAIC Motor's MG registered in the EU last month fell 45% from June, according to research from Dataforce, which compiled results across the 16 member countries that have reported July figures to date. The drop may have been exaggerated by carmakers rushing to get EVs to dealers before the added levies took effect July 5. "We saw a huge push from Chinese manufacturers" to empty stockpiles in June, said Matthias Schmidt, an independent auto analyst based near Hamburg. "That likely caused an inventory burn." The provisional tariffs, which raise import duties to as high as 48%, are meant to shield an important EU industry from Chinese rivals that enjoy structural advantages in key areas such as battery technology that have benefited from state subsidies. Political tensions remain high, with Beijing threatening to retaliate amid talks to resolve the matter. Overall, the Chinese brands weren't massively out of step with the 36% slide in EV sales for the 16 countries tracked by Dataforce. BMW, Stellantis and Tesla also import Chinese-made EVs that are subject to the added EU tariffs. The June spike was less pronounced for Western companies that were more cautious in managing their inventory, Schmidt said. There's little in the July figures to suggest Chinese brands have tempered their ambitions to expand in Europe. From a standing start in 2019, MG, BYD and others have steadily grown — their share of the EU's electric-car market stood at 8.5% in July, based on the Dataforce figures, up from 7.4% a year earlier. While EVs are still a small part of the entire European market, they're poised to dominate over time as combustion cars are phased out. BYD sold three times more EVs in the 16 markets in July than it did a year earlier. MG, part of Chinese state-owned SAIC, posted a 20% drop in July from a year earlier, while Polestar sales declined 42%. "BYD's increases are really softening the fall" for Chinese brands, said Julian Litzinger, an analyst wth Dataforce.  A BYD stand at a Fan Zone in Berlin for the Euro 2024 football championship. Photographer: Liesa Johannssen/Bloomberg For now, BYD's pricing strategy in Europe remains unchanged after the tariffs. The carmaker expanded into Poland on Aug. 6, signaling it's prepared to live with higher duties as it builds a plant in Hungary. The new tariffs were put in place after an EU probe found Beijing subsidizes its EV industry to an extent that harms the bloc's carmakers. MG is subject to an additional 37.6% duty on top of the existing 10% rate, while Geely and BYD will pay 19.9% and 17.4% more, respectively. The levies will become permanent in November, barring a deal between Brussels and Beijing. The tariff debate has coincided with a slowdown in global EV growth that's put pressure on manufacturers across regions. EU policymakers are seeking to balance job protection with the goal of phasing out new fossil fuel-burning cars by 2035. The Dataforce figures for July include the largest EU markets, such as Germany, France and Italy. Results for all 27 countries will be available later this month. In Germany, Chinese brands made up 8% of vehicle registrations in July, down from 13% in June, according to Dataforce. In France, the drop was to 5% from 8%. In the UK, which isn't an EU member, Chinese brands gained ground. — By Anthony Palazzo and Danny Lee  Xiaomi SU7 electric vehicles at one of the company's stores in Shanghai. Photographer: Qilai Shen/Bloomberg Xiaomi's electric-vehicle sales are expected to reach 27 billion yuan ($3.8 billion) this year, with sales of 100,000 to 120,000 units, according to Bloomberg Intelligence. The smartphone maker is slated to release earnings next week along with Chinese EV maker Xpeng and Geely. | 
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