The European Union has voted to move forward with its plan to impose tariffs on electric cars imported from China, despite recent moves by Germany to attempt to block the proposal.
Chinese EV production has soared lately, as the country’s efforts to secure mineral contracts and build up its local auto manufacturing base have borne fruit.
Along with that drastic rise in EV production has come a rapid rise in EV sales within the country – and a rise of exports as well.
As those exports have hit international shores, audiences from Australia to Europe have found Chinese EVs as quite a reasonable value proposition when compared to domestic manufacturers, and sales have risen overseas as they have domestically.
This has been troubling for domestic European manufacturers, who have found it tough to keep up with the low prices that Chinese manufacturers are able to sell their cars at.
The EU has accused China of “flooding” its market with these EVs, and of unfair subsidy practices towards its local auto industry. (The EU also subsidizes EVs)
As a result of this, Europe decided to impose tariffs on Chinese EVs, with a sliding scale based on which manufacturers it deems most out of compliance with its investigations. Those numbers have been modified as negotiations have gone on, but have currently landed between 7.8% and 35.3%. This is notably much lower than the US tariff, which was recently raised from 25% to 100% and went into effect just a week ago.
Europe votes to impose tariffs, with German opposition
Today, the European Commission took a final vote to impose the tariffs. 10 member states supported the plan, 12 abstained, and 5 voted against, with the most significant opposition coming from the EU’s most populous country and the one with its largest auto industry, Germany.
While the initial vote passed easily with little opposition and many abstentions, including from Germany, the country changed its position and decided to oppose the tariff at today’s vote.
Germany had hoped to rally more nations to vote against the tariffs, but it was always going to be a high bar, requiring 15 countries and 65% of the EU population to overturn the previous vote. As of this week, it became apparent that Germany was never going to get there.
At first glance it seems incongruous that the country with the largest auto industry in Europe might oppose tariffs that are intended to protect the European auto industry. But the reason for this is because German automakers sell a lot of high-end and profitable vehicles to China, and fears retaliatory tariffs of the sort that often come up when countries erect trade barriers.
China specifically has been quite effective at targeting its retaliatory tariffs in the past. In response to trump-era tariffs, China enacted a 25% tariff on US goods in 2018 which, among other things, devastated the US soybean industry. China has already started investigating several EU product categories like brandy, dairy and pork products, and related European industry groups feel “abandoned” by their governments in face of this threat.
Beyond the threat of tariffs, Chinese consumers have been increasingly looking inward as well, abandoning foreign brands partially due to nationalistic sentiment as they feel that other countries have treated them unfairly.
So Germany sees how a Chinese tariff on European autos might hasten its decline in the world’s (just-recently-2nd) most populous country, cutting it off from 1.4 billion potential consumers.
Its vote against may have been tactical, though – an attempt to have their cake and eat it too. Germany may want the protective effects of a European tariff, allowing them to continue to sell to domestic buyers without being undercut by Chinese brands, but also want China to think that they were trying to stop the tariffs, thus lessening Beijing’s desire to retaliate against poor little Germany which did everything in its power to stop these tariffs.
European tariffs are also significantly lower than those recently imposed by the US, and Europe has been actively talking to Beijing and has modified tariff pricing and may modify it more going forward. This may be another tactical decision – by showing that it is more willing to work with China than the US is, and by setting a more “reasonable” tariff, the EU can portray itself as less extreme and thus less worthy of retaliation.
The fact is, tariffs are popular, but usually don’t work very well. We have a lot of examples of this happening, and while “most economists agree” should not be a silver bullet rule for interpreting the world, in this case, I think they’re generally right.
At best, I think these tariffs will offer a temporary reprieve to local manufacturers – which we have already seen they are more than willing to use to delay their plans and put themselves back into the exact same position they’re already in: behind.
Meanwhile, what it immediately does is increase prices for EU consumers, and reduce EU manufacturers’ desire or need to compete on price. In a time where every country around the world has recently struggled with inflation, making one of the things that households spend the most money on more expensive doesn’t seem too wise.
This will also make people less willing to replace gas guzzlers with newer, cheaper-to-run electric vehicles, which means not only sustained high fuel costs for those families, but sustained high climate and health costs from the increased climate change that comes from using those old vehicles.
So I just don’t see this as the smart choice. Germany eventually came around to the right decision here – but it could have exercised leadership earlier, instead of playing tactical games and trying to appear as if it’s on both sides.
There’s always the chance the government might put more tariffs on solar panels, so the best time to go solar is now. Find a reliable and competitively priced solar installer near you on EnergySage, for free. They have pre-vetted installers competing for your business, ensuring high-quality solutions and 20-30% savings. It’s free, with no sales calls until you choose an installer. Compare personalized solar quotes online and receive guidance from unbiased Energy Advisers. Get started here. – ad*
FTC: We use income earning auto affiliate links.More.
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Trump’s Big Beautiful bill becoming law and going after EVs and solar, Tesla, Ford, and GM EV sales, Electrek Formula Sun, and more
Today’s episode is brought to you by Bosch Mobility Aftermarket—A global leader and trusted provider of automotive aftermarket parts. To celebrate Amazon Prime Day July 8th through 11th, Bosch Mobility is offering exclusive savings on must-have auto parts and tools. Learn more here.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
Advertisement – scroll for more content
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
A new Tesla prototype was spotted again, reigniting speculation among Tesla shareholders, even though it’s likely just a Model Y, potentially a bit smaller, and the upcoming stripped-down, cheaper version.
It sparked a lot of speculation about it being the new “affordable” compact Tesla vehicle.
There’s confusion in the Tesla community around Tesla’s upcoming “affordable” vehicles because CEO Elon Musk falsely denied a report last year about Tesla’s “$25,000” EV model being canceled.
Advertisement – scroll for more content
The facts are that Musk canceled two cheaper vehicles that Tesla was working on, commonly referred as “the $25,000 Tesla” in early 2024. Those vehicles were codenamed NV91 and NV92, and they were based on the new vehicle platform that Tesla is now reserving for the Cybercab.
Instead, Musk noticed that Tesla’s Model 3 and Model Y production lines were starting to be underutilized as the Company faced demand issues. Therefore, Tesla canceled the vehicles program based on the new platform and decided to build new vehicles on Model 3/Y platform using the same production lines.
We previously reported that these electric vehicles will likely look very similar to Model 3 and Model Y.
In recent months, several other media reports reinforced this, and Tesla all but confirmed it during its latest earnings call, when it stated that it is “limited in how different vehicles can be when built on the same production lines.”
Now, the same Tesla prototype has been spotted over the last few days, and it sent the Tesla shareholders community into a frenzy of speculations:
Electrek’s Take
As we have repeatedly reported over the last year, the new “affordable” Tesla “models” coming are basically only stripped-down Model 3 and Model Y vehicles.
They might end up being a little smaller by a few inches, and Tesla may use different model names, but they will be extremely similar.
If this is it, which is possible, you can see it looks almost exactly like a Model Y.
It’s hard to confirm if it’s indeed smaller because of the angle of the vehicle compared to the other Model Ys, but it’s not impossible that the wheelbase is a bit smaller – although it’s hard to confirm.
Either way, the most significant changes for these stripped-down, more affordable “models” are expected to be cheaper interior materials, like textile seats instead of vegan leather, no heated or ventilated seats standard, no rear screen, maybe even no double-panned acoustic glass and a lesser audio system.
As previously stated, the real goal of these new variants, or models, is to lower the average sale price in order to combat decreasing demand and maintain or increase the utilization rate of Tesla’s current production lines, which have been throttled down in the last few years to now about 60% utilization.
If this trend continues, Tesla would find itself in trouble and may even have to close its factories.
FTC: We use income earning auto affiliate links.More.
CANNES — Wall Street’s new plumbing is being built on Ethereum and this week its architects took over the same French Riviera villas and red carpet venues that host the Cannes Film Festival in May.
The Ethereum Community Conference, or EthCC, took over the beachside town that was swarming with crypto founders, developers, and some of the institutional giants now building atop the infrastructure.
The crypto elite climbed the iconic red-carpeted steps of the Palais des Festivals — a cinematic landmark now repurposed as the stage for Ethereum’s flagship European event.
“The atmosphere this year was palpable in Cannes,” said Bettina Boon Falleur, the powerhouse behind EthCC for the past seven years. “The prestige of the location, combined with the quality of talks, has reinforced Ethereum’s stature and purpose in the wider ecosystem.”
Private parties sprawled across cliffside estates and exclusive resorts, but the conversations were less about price action and more about the blockchain’s evolving role as the back-end of global finance.
EthCC, now in its eighth year, has tracked Ethereum’s trajectory from scrappy experiment to institutional backbone.
“That impact was unmistakable this year,” Falleur said. “From Robinhood embracing decentralized finance infrastructure via Arbitrum to local governments like the City of Cannes exploring deeper integration with the crypto economy.”
Indeed, one of the boldest moves came this week from Robinhood, which became the first publicly traded U.S. company to launch tokenized stocks on-chain.
At a product showcase held inside a Belle Époque mansion overlooking the sea, Robinhood unveiled a sweeping new crypto strategy — including the ability for European users to trade tokenized U.S. stocks and ETFs via Arbitrum, a Layer 2 network built on Ethereum.
The announcement helped push Robinhood stock past $100 for the first time, capping off a week of fresh all-time highs and a more than 30% rally since being snubbed by the S&P 500 during a recent rebalance.
Inside the Palais des Festivals, ETHCC draws founders, developers, and institutions into the same halls that host the world’s biggest film premieres — this time, for the future of finance.
MacKenzie Sigalos
Ether, the token native to the Ethereum blockchain, was up nearly 6% on the week and several public equities tied to the blockchain have rallied alongside it.
BitMine Immersion Technologies, a company that mines bitcoin, gained more than 1,200% since announcing it would make ether its primary treasury reserve asset. Bit Digital, which recently exited bitcoin mining to “become a pure play” ethereum staking and treasury company, gained more than 34% this week. And SharpLink Gaming, which added more than $20 million in ether to its balance sheet this week, jumped more than 28% on Thursday.
Ether ETF inflows are rising again too — a sign that institutional investors are warming back up.
Ether is still down more than 20% this year and lags far behind bitcoin in market cap and adoption. But funds tracking ETH have seen two straight months of mostly net inflows, according to CoinGlass data. Still, ether ETFs total just $11 billion — compared to $138 billion in bitcoin ETFs.
Institutions aren’t betting on Ethereum for hype — they’re betting on infrastructure.
Even as prices stall and the network faces headwinds from slower base layer revenues and faster rivals like Solana, the momentum is shifting toward utility.
“Ethereum is getting plugged into these core transactional systems,” Paul Brody, global blockchain leader at EY, told CNBC on the sidelines of EthCC. “Investors, savers, people moving money — they are going to start shifting from some of the older mechanisms of doing this into Ethereum ecosystems that can do these transactions faster, cheaper, but also very importantly, with significant new functionality attached to it.”
Crypto founders and developers climb the iconic red-carpeted steps of the Palais des Festivals — a familiar backdrop for the Cannes Film Festival, now repurposed for Ethereum’s flagship European event.
MacKenzie Sigalos
Deutsche Bank recently announced it’s building a tokenization platform on zkSync — a faster, cheaper blockchain built on top of Ethereum — to help asset managers issue and manage tokenized funds, stablecoins, and other real-world assets while meeting regulatory and data protection requirements.
Coinbase and Kraken are also racing to own the crossover between traditional stocks and crypto.
Coinbase has filed with the SEC to offer trading in tokenized public equities, a move that would diversify its revenue stream and bring it into more direct competition with brokerages like Robinhood and eToro.
Kraken announced plans to offer 24/7 trading of U.S. stock tokens in select overseas markets.
BlackRock‘s tokenized money market fund, BUIDL — launched on Ethereum last year — offers qualified investors on-chain access to yield with redemptions settled in USDC in real time.
Stablecoins, meanwhile, continue to serve as the backbone of Ethereum’s financial layer.
“The builders and contributors at EthCC aren’t chasing the next bull run,” Falleur said, “they’re laying the groundwork to make Ethereum home for the next billion users.”
Even as newer blockchains tout faster speeds and lower fees, Ethereum is proving its staying power as a trusted network.
Vitalik Buterin, Ethereum’s co-founder, told CNBC in Cannes that there is an assumption that institutions only care about scale and speed — but in practice, it’s the opposite.
Ethereum co-founder Vitalik Buterin delivers a keynote at ETHCC, laying out the network’s next steps — and its values test — as institutional adoption accelerates.
EthCC
“A lot of institutions basically tell us to our faces that they value Ethereum because it’s stable and dependable, because it doesn’t go down,” he said.
Buterin added that firms often ask about privacy and other long-term features — the kinds of concerns that institutions, he said, “really value.”
Tomasz Stańczak, the new co-executive director of the Ethereum Foundation, said institutions are choosing Ethereum for the same core reasons.
“Ten years without stopping for a moment. Ten years of upgrades, with a huge dedication to security and censorship resistance,” he said.
He added that when institutions send orders to the market, they want to be “absolutely sure that their order is treated fairly, that nobody has preference, that the transaction actually is executed at the time when it’s delivered.”
Those guarantees have become increasingly valuable as stablecoins and tokenized assets move into the mainstream.
Ethereum’s core values — neutrality, security, and censorship resistance — are emerging as competitive advantages.
The real test now is whether Ethereum can scale without losing its values.
“We don’t just want to succeed,” Buterin said from the mainstage of the Palais this week. “We want to be something that is worthy of succeeding.”
He said the hope is that future generations will look back and see a network that truly delivered openness, freedom, and permissionless access to the masses.
White-clad guests dance poolside at the rAAVE party in Cannes.
MacKenzie Sigalos
But the week didn’t end in the conference halls, it closed with tradition. On the balcony of Villa Montana, overlooking the Bay of Cannes, the rAAVE party lit up.
White-clad guests sipped cocktails as the DJ spun by the pool, haze curling from smoke machines.
This year, Chainlink co-founder Sergey Nazarov and DeFi icon Stani Kulechov, founder of Aave, stood atop the balcony overlooking the crowd and the light-dotted skyline of Cannes.
It was a fitting snapshot of the momentum behind Ethereum’s institutional rise and symbolic of Web3’s shift from niche experiment to financial mainstay.