Comments Off on How Chinese anti-dumping measures impact EU import of e-bikes
In 2019, Taiwan has taken the lead in the export of electric bicycles 25 km/h to the EU. Exports increased by 80% to almost 390,000. This was of course due to the imposition of anti-dumping duties on Chinese e-bikes. This forced companies assembling in China to move their operations. Some of them crossed the Formosa Strait to set up shop in Taiwan.
Logically, the relocation of these e-bike assemblers accused of and punished for dumping should have resulted in Taiwan’s average export value being dragged down. Instead, it went up with 5.4% This further questions the very dubious Commission decision to penalize imports from China.
In the meantime, efforts are continuing to make assembly of electric bicycles outside Europe more difficult. At the request of EBMA, in October last year, the European Commission has suddenly amended the rules of origin for countries with non-preferential status such as Taiwan: without prior warning and without a transition period. As a result, it is much more difficult to use Chinese parts in Taiwanese assembly. Thus, Europe tightens the thumbscrews on Taiwan without EBMA having to go through the difficult procedure of a circumvention complaint against the country.
Apart from Taiwan (for the time being), very few non-EU countries seem to really benefit from the dumping. The growth percentages for Turkey, Malaysia, Indonesia and Cambodia, among others, are considerable, but the total export figures of these countries remain limited. In 2019, total export from non-EU countries declined 30% but increased in value by 38% from 602 to € 831. This value is very close to the average value of intra-EU imports for 2019: € 860. Total intra-EU imports increased by 47.4% to almost 2.3 million units.
That indicates that much of the assembly was brought from China to Europe. And here too, the average value seriously questions the Chinese dumping measures. If dumping had actually been such that action had to be taken, the relocation of those assemblers would have led to a significant drop in intra-EU import values. Quod non. In 2019, it decreased only by 3.2% compared to 2018. Supporters of the dumping measures will no doubt point to the fact that a lot of assembly activities have been moved to the old continent. However, dumping measures have never been intended for relocation of production.
Comments Off on Belgian 2020 speed pedelec registrations slightly lower than in 2019
The Belgian registrations of speed pedelecs in 2020 did not match the results of 2019. The registrations came to a total of 12,503. That is 413 units or 3.2% less than the year before. In that year, speed pedelec registrations in Belgium made a leap of more than 44%.
The lockdowns in Belgium have clearly taken their toll. The country was locked for the first time from March 17 to May 3. Sales in those three months were more than 26% lower than in the same period in 2019. In the second lockdown from 2 November to 13 December, the damage was limited. Only 1.7% fewer speed pedelecs were registered in November and December.
In June, and especially in August, there was a lot of catching up. The registrations in June were a quarter higher than in 2019, in August the increase even reached 36%. These figures probably include quite a number of speed pedelecs that could not be delivered in the lockdown.
It is not clear to what extent the shortage of parts has affected sales. From September onwards, registrations consistently lagged behind the year before, although the positive effect of COVID-19 should have played out in those months.
Comments Off on LEVA-EU proposes to end discrimination of EU e-bike assemblers
On 7 December 2020, LEVA-EU has reported on how Regulation 2020/1296 discriminates EU e-bike assemblers compared to companies that assemble both conventional and electric bicycles. The current rules result in truly surreal situations as described in the article below. Just before Christmas, LEVA-EU has presented the European Commission with amendments to remove the discrimination.
In order to prevent circumvention of anti-dumping duties on conventional bicycles, in 1997 the European Commission extended the duties to a number of essential bicycle components such as frames, forks, wheels, etc. In 2013, the Commission confirmed that, if these components were to be used for the assembly of electric bicycles, the 48.5% anti-dumping duty did not apply. This was laid down in Regulation 512/2013. E-bike assemblers could obtain that exemption from the duties by applying for end-use authorization. However, it has only now become clear how wrong and unfair the procedure of end-use authorization is.
Paying for non-existing duties
First of all, the application for end-use authorization can only be initiated if the company is already importing components. Even though the anti-dumping duty does not apply, the company has to pay the duties until end-use authorization is granted. There is in other words no suspension of duties during the procedure and no possibility of having the duties refunded once authorization is granted. This makes it virtually impossible for new assembly operations of e-bikes tot start up in Europe, unless the company has access to very substantial financial resources.
End-use authorization is granted by national customs who have the competence to decide on the procedure. In the cases reported to LEVA-EU, the customs impose often excessive administrative conditions and comprehensive guarantees. The authorization is only valid for a limited period of time, upon which companies have to reapply. Also, the companies have an obligation to discharge the end-use within 6 months. There is in other words a deadline for using the parts in the assembly of an e-bike. Imagine, today, with the huge shortage of component supplies that you are being stuck with for instance a number of frames that you cannot use in an assembly because other parts necessary to finish the e-bike will only arrive next year.
National customs authorities are not bound by any time limits in granting end-use authorization. So far, only two companies have confirmed to us that they have effectively obtained the authorization, which took several months. In another case, the company has first introduced an application in August 2018. In June 2020, exactly 698 days after their firs application, their request was denied and they were forced to introduce a new request. All this time, the company paid 48.5% on the essential bicycle components they imported for the assembly of e-bikes.
Despite that, last summer the company was raided by the customs and subsequently accused of … circumventing anti-dumping on e-bikes! The case may well be referred to a criminal court with the risk of a judicial conviction as well as having to pay anti-dumping duties on e-bikes and penalties. By now, Franz Kafka must be turning in his grave. The crux of the matter is that in the past 2.5 years, customs have made the fundamental mistake of treating this application for end-use authorization as a request for authorization to import less than 300 pieces a month instead of an authorization for the assembly of e-bikes.
The absurdity of end-use authorization has only come to light following the imposition of anti-dumping duties on electric bicycles. The new measures forced a lot of companies to find alternatives for their assembly operations in China. A number of them decided to move assembly to Europe and often found EU assemblers prepared to subcontract for them. These assemblers had Commission exemptions for the import of bicycle components for conventional bicycles, which they also used to import components for electric bicycles. However, there was uncertainty as to the legality of this process. That is why the European Commission issued Regulation 2020/1296 as a result of which all exemptions for components for conventional bicycles were extended into exemptions also valid for components for electric bicycles.
However, the capacity of European bike assemblers was quickly exhausted. So, some companies had to establish new assembly operations in Europe for electric bikes only. And these companies bumped into the huge hurdle of end-use authorization.
Admittedly, for the benefit of e-bike assembly in Europe there was a need for the legal clarification though Regulation 2020/1296. However, why the Commission found it necessary to also introduce a clear discrimination of e-bike assemblers remains a big question mark.
In a meeting shortly before Christmas, LEVA-EU asked the Commission exactly that question. We did not get an answer as to the reasoning behind this bizarre Regulation but the Commission invited us to propose a solution to the problem. In the meantime, LEVA-EU in cooperation with its lawyers, has developed a substantiated proposal for amending the Regulation. The proposal is aimed at providing e-bike assemblers with access to the same exemption procedure as companies that assemble both bikes and e-bikes. The procedure would no longer be the competence of national customs authorities but of the European Commission and would be subject to the same deadlines as the existing exemption procedure. During the procedure, duties would be suspended. LEVA-EU also proposes to convert existing end-use authorization into Commission exemptions and on-going applications into applications for Commission exemptions.
The Commission has acknowledged receipt of LEVA-EU’s proposal. We are now waiting for the Commission’s answer on the substance. However, it is clear that this Regulation, which directly prohibits the establishment of new companies in the EU cannot remain unchanged. LEVA-EU calls on all companies who have applied for end-use authorization as well as those who have obtained end-use authorization to come forward. Please contact Annick Roetynck
The second TRL on-line survey for their study on safety requirements for LEVs is online until 4th January.
At the request of the European Commission, TRL is carrying out a study aimed at identifying the minimum safety requirements for safe use of light, electric vehicles on public roads. The study is also meant to assist the Commission in possible changes of vehicle categorization and technical requirements in the L-category. LEVA-EU welcomes this initiative since the trade association has been consistently arguing that current type-approval needs a fundamental change. The legislation creates huge bottlenecks for light, electric vehicles.
A first on-line survey for the study took place in October. TRL has now launched a second survey, in which they ask to rate a range of potential regulatory measures. The survey will be online until 4th January.
If you haven’t received a direct email from TRL inviting you to complete the survey and you wish to do so, please contact Rosie Sharp at TRL, firstname.lastname@example.org.
In October, LEVA-EU has organized a series of on-line meetings to provide LEV-companies with a better understanding of the current legislation and the problems resulting from those rules. The presentations and on-line recordings of these meetings are available upon simple request to email@example.com. There were 4 meetings, respectively on:
After this second on-line survey, TRL will organize in January an on-line workshop, in which they will discuss a shortlist of potential measures with the LEVA-sector. The study is expected to be completed by February 2021.
Comments Off on Commission proposes to modernise EU legislation on batteries
Today, the European Commission proposes to modernise EU legislation on batteries, delivering its first initiative among the actions announced in the new Circular Economy Action Plan. Batteries that are more sustainable throughout their life cycle are key for the goals of the European Green Deal and contribute to the zero pollution ambition set in it. They promote competitive sustainability and are necessary for green transport, clean energy and to achieve climate neutrality by 2050. The proposal addresses the social, economic and environmental issues related to all types of batteries.
In a first reaction, LEVA-EU Partner Recharge welcomes the proposal as “a meaningful legislative framework that will close the gap in existing legislation and can level the playing field with international actors“. However, the battery trade association also issues a stark warning: “In today’s proposal we see a high level of complexity and fear that this will translate into over-regulating fast-paced, innovative industries such as batteries or electric mobility. Closing the gap with international competition will depend on long-term investments and a coherent regulatory framework.”
LEVA-EU is currently analyzing the Commission’s proposal and will consult with its members on an accurate response for the benefit of the LEV-sector. For more information, please contact Annick Roetynck, +32 9 233 60 05, firstname.lastname@example.org
The Commission’s proposal is here, the annexes to the proposal here. The EU press release on the proposal is here Recharge’s initial response is here.
Comments Off on Eddie Eccleston appointment as SBS-expert extended
Further to the call for experts published in June 2020, the SBS General Assembly confirmed the selection of 61 experts to represent the European SME position on standardisation Technical Committees, Sub-Committees and Working Groups in CEN, CENELEC, ETSI, ISO and IEC.
The selected experts, from 15 countries across Europe, will be active on 70 standardisation Technical Committees and more than 150 Working Groups, allowing SBS to influence the development of standards across more than 14 sectors.
LEVA-EU is very pleased with the reappointment of Eddie Eccleston to defend SME-interests in WG 5 – EPACs and WG 9 – (e)cargobikes of CEN TC 333.
Comments Off on Commission Regulation 2020/1296 discriminates EU E-Bike Assemblers
On 29 September, we announced the publication of a new Regulation on essential bikes parts from China. LEVA-EU has now thoroughly analysed the text and concludes that the Regulation results in a serious discrimination of companies that only assemble electric bicycles. Below is a summary of this analysis. On 8 December, LEVA-EU has a meeting with DG Trade to discuss the problem. A story to be continued.
European assemblers can obtain an exemption from this anti-circumvention duty. They must prove to the European Commission that the value of Chinese components does not exceed 59% of the value of the bike or the value added through assembly must be more than 25% of the manufacturing cost.
Once such exemption obtained, it is valid indefinitely and it does not require any additional compliance/reporting guarantees and obligations such as paying security deposits, etc.
Some essential bicycle parts are also used for the assembly of electric bicycles. They have been excluded from the 48.5% anti-circumvention duties by Regulation 512/2013. However, explicit exemption must be obtained by applying for end-use authorisation with national customs.
With the introduction of anti-dumping duties on electric bicycles from China, some companies have moved their assembly to Europe. In some cases, companies had an exemption for essential bicycle components for conventional bicycles, which they also used to import bicycle components for electric bicycles. However, there was uncertainty as to the legality of this procedure.
In an attempt to provide legal certainty, the European Commission has published Regulation 2020/1296. With that Regulation, the Commission certifies that companies in the EU, that assemble both conventional and electric bicycles, are allowed to use their exemption, originally awarded for assembly of conventional bicycles, for the duty free import of essential bicycle components for the assembly of electric bicycles.
This extension of the scope of the exemption appears to be automatic. In the Regulation, there is no procedure to report nor to assess whether companies effectively use essential bicycle components for the assembly of electric bicycles.
This Regulation does not grant companies, that assemble electric bicycles only, the same exemption for essential bicycle components imported for the assembly of electric bicycles. Instead, these companies must obtain exemption from 48.5% anti-circumvention duties through the end-use authorisation. This procedure is handled by national customs. There are numerous examples of companies trying to obtain this authorisation in vain. The administrative and financial burden resulting from this procedure is extremely heavy and complicated.
LEVA-EU has concluded that Commission Implementing Regulation 2020/1296 violates the principle of equal treatment and creates unfair conditions in the market of electric bicycles in the EU. Therefore, LEVA-EU is of the opinion that the Commission makes either all producers of electric bicycles subject to an end use relief or to the Commission exemption system.
If your company is assembling e-bikes only and has (had) difficulties in obtaining end-use authorization, please contact Annick Roetynck at LEVA-EU, tel. +32 9 233 60 05, email email@example.com. We are collecting relevant testimonies.
Comments Off on The EU asssassination of e-bike businesses
The electric bicycle sector in Europe is currently suffering from a dire shortage of supply to meet demand. No one was prepared for COVID-19 and the market explosion that the virus caused. The worldwide stock of parts is exhausted and many electric bicycle dealers are only taking orders. But there is more to it. The scarcity is also a direct consequence of the trade policy that the EU has been pursuing since 1993 in the field of bicycles and electric bicycles. In doing so, the intention seems to be to eradicate part of the European e-bike sector. Be warned, it is a long and difficult story.
Anti-dumping measures are temporary measures to solve a temporary problem. The exception to prove this rule is the anti-dumping measures on bicycles from China. They have been in place for 27 years. Despite the measures, there is no bicycle manufacturing left in the EU. For purely economic reasons, those who effectively produced bicycles, including the guiding forces behind the dumping complaint, have moved on to buying components, to a large extent in China, and assembling them into bicycles in the EU. In the meantime, assembly cost in the EU is in some instances lower than in China.
Non-existent Union production
Component production in the EU has also disappeared to the point where, in 2018, the EU decided to suspend regular import duties for a number of bicycle components. In Regulation 2018/2069 the Council states: “The Union production of 87 products (…) is inadequate or non-existent. It is therefore in the interest of the Union to suspend totally the autonomous CCT duties on those products.” These products included a number of bicycle components. The Regulation ensures the supply of these components from countries outside the EU, to a large extent from China.
This Regulation was implemented even though in 1997 the EU extended the dumping measures for bicycles to some of the same bicycle components listed in the above Regulation. As a result of Regulation 88/97, if you wanted to import these components from China to assemble them into bicycles in the EU, you had to pay 48.5% so-called anti-circumvention duties. The Commission had found that the anti-dumping duties on bicycles were being circumvented in two ways:
by shipping semi- or completely knocked down bicycles, which only required minimum assembly in the EU
by transhipping containers with bikes from China through 3rd countries to be sold in the EU without anti-dumping duty.
So, the EU extended the anti-dumping duties to some countries accused of assisting in transhipping, as well as to the import into the EU of certain components. However, assemblers in the EU were enabled to obtain an exemption from anti-circumvention duties on components from the Commission. They had to prove that no more than 59% of the value of their bikes consisted of Chinese components or that they added 25% to the value through their assembly.
Almost all EU bicycle companies who applied in 1997 and shortly afterwards, obtained the exemption for an indefinite period and without much further ado. Obtaining an exemption in a later stage proved to be much more challenging. According to the Regulation, you must first import for at least 6 months, in other words pay an extra 48.5% on Chinese components before you can apply for an exemption. Not many start-ups would be able to overcome such a financial pitfall. For one party we know of, the Commission took 4 years, whilst the applicant was subject to the 48.5%.
27 years anti-dumping
So, this measure is almost an insurmountable obstacle to start a new bike assembly operation in the EU. The companies behind the anti-dumping complaint saw their mission accomplished. The anti-dumping measures ensured that China would be kept away from their core business, i.e. mid- and high-range bicycles. What’s more, the exemption system for anti-circumvention duties ensured that very few new EU competitors would come on the market. Everything went on quietly. No more competition meant no opposition against five yearly reviews, which resulted in 5 extensions. Today, 27 years later there is no prospect of ever getting rid of this temporary measure for a temporary problem. This is all the more the case since the EU bicycle manufacturers now also rely on the anti-dumping measures against bicycle and bicycle components from China to secure a similar position in the EU e-bike market. This is how the fork is in the stem.
Some but not all so-called EU bicycle manufacturers were involved in the e-bike trend from the beginning. Again, these “manufacturers” were not manufacturing e-bikes, they were buying parts assembling them into e-bikes. As for those e-bike components, Bosch at that time was non-existing in the e-bike world and Shimano was still doubting heavily as to the longevity of the new invention.
Hesitation in the conventional bicycle sector allowed new companies to come on the market and thrive. Whilst the “old” EU bicycle companies were tied to the demand and expectations of their dealer-network, the new companies could choose between Internet, brick and mortar shops or both, whilst not carrying any history in negotiating distribution deals. Some of these EU companies became extremely successful and fast growing. They had managed to set up a lean and efficient supply chain in China. As a result, they offered more reasonably priced e-bikes and more tempting terms and conditions.
0.9% below expectation
Even though the EU market grew consistently, the EU bicycle assemblers were confronted with more competition, the inability to conquer Internet and e-bike growth being at the expense of their conventional bike business. So, once again they went to the Commission whom they had been frequenting so long. The Commission chose to believe the allegations about distressed EU manufacturers, thousands of EU jobs being under threat and assorted concoctions about cheap Chinese e-bikes flooding the market. The Commission found the profitability of the distressed companies to be 0.9% below their expectation and consequently hit large numbers of European companies assembling in China with up to 79.3% duties.
These European companies had to turn their business plan upside down overnight. LEVA-EU assisted a group of 14 importers in this case. We calculated that the damage to these 14 alone, resulting just from the investigation amounted to € 100 million. When the duties became effective in January 2019, some EU assemblers definitively moved their activities to the EU, others went elsewhere in Asia.
Of those who came to the EU, some managed to have their assembly being done by companies that had an exemption for conventional bicycle parts. But capacity in the EU was too limited to meet the full demand. So, others set up new assembly activities in the EU and very quickly ran into trouble again.
Everywhere in Europe, alarm bells at customers’ services went off. Essential bicycle components were imported by non-exempted parties. Not that they had any premeditated intention to circumvent the duties on essential bicycle parts. They were simply unaware of the fact that their electric bike parts were identical to bike parts subject to anti-circumvention duties. They were also unaware of the fact that the Commission had published Regulation 512/2013 as a result of which essential bicycle components were exempted from duties, if used for the assembly of e-bikes.
Only, to obtain that exemption, you had to prove to customs that you were not using the parts for conventional bikes nor selling them to non-exempted parties. Only with a so-called end-use authorisation, were you allowed to import these components for e-bikes free of anti-circumvention duties. And the national customs’ services had the liberty of developing their own rules for proving end-use.
Several young European companies have applied for end-use authorisation but are confronted with customs who are making their life extremely difficult. We have a growing collection of downright horror stories.
As said, companies that started from conventional bikes had an exemption and were using this to import components for electric bicycles. However, there was uncertainty as to the legality of this procedure. Last September, the Commission published a new Regulation as a result of which exemptions attributed for bicycle components are extended to include those components for electric bicycles.
The Commission decided to grant this favour only to bicycle companies that also produce electric bicycles, not to companies that only produce electric bicycles. Also, the procedure appears to be automatic and the Regulation does not mention any procedure to control the system. The question is for instance what happens if components are imported for e-bikes but, in reality used for conventional bicycles, thus exceeding the 59% circumvention threshold.
Whilst conventional bicycle assemblers who also assemble electric bicycles can rejoice over this extremely useful favour from the Commission, EU electric bike assemblers are suffering and sometimes confronted with the most surreal problems. Most of them are kept waiting by the customs for an end-use authorisation. One of these waiting assemblers has been recently raided by customs and accused of anti-circumvention, despite the fact that he has consistently paid 48.5% on the bike components in anticipation of the end-use authorisation. In another case, the customs are in the process of proving that the wheels with hub-motors he imported are components for conventional bikes. He had to pay 48.5% on them as a guarantee.
In the meantime, the Commission continues to shut doors. Upon the duties announced in January 2019, some assemblers moved to countries with non-preferential origin such as Taiwan, Thailand or Malaysia. Recently, the Commission decided to change the rules of origin for these countries. An electric bike will only be considered to originate in these countries if 45% of the ex-works price is originating. The question is how many of these companies will be able to obtain a motor and/or battery in the country where they are assembling. Also, there is no transition period whilst, in normal times, lead-times for e-bikes are 3 to 6 months. Today, some companies have already ordered components for 2022.
And what is the alternative for these companies? GSP and LDC countries are still an option today but how long before the EU shuts that door as well? In that case, they are only left with the option of assembly in the EU. Here however, they will have great difficulties to obtain end-use authorisation to be able to import certain components without 48.5%. And by now, there are no European bicycle assemblers with exemptions left who have any available capacity.
The big losers?
There is still one measure to be taken: anti-circumvention duties on e-bike components. Only those companies that today have secured the supply of motors and possibly also batteries from outside China are certain to survive such anti-circumvention measures. And those are … the EU bicycle assemblers who are behind the anti-dumping duties. Competition wiped out, supply secured, control over prices regained, Commission convinced to keep the measures on for the next 27 years … mission accomplished.
Besides the EU companies that are bound to perish, who are the big losers? The EU-citizens! They will have to pay a lot more for their electric bikes. A lot less e-bikes will come on the market then what is needed to make mobility more sustainable.
Furthermore, the chance to achieve climate goals will be considerably reduced. Again, the citizens loose. But the EU bicycle assemblers have even this covered since they have very close and friendly ties with the European cyclists’ congregation. And as for the Commission, it is ironic how one DG issues a Green Deal to throw billions at green mobility, while another DG is assisting in the assassination of part of the sector that should produce that green mobility. A rather special interpretation of the Biblical saying: do not let your left hand know what your right hand does.
In light of all the above, LEVA-EU is consulting with lawyers on the possible infringement of EU competition rules and on possible court actions.
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