A mild rally in the shares of automakers after the European Union voted to impose tariffs on electric vehicles from China does little to alleviate a bleak year for the sector’s investors.

Brian Gu, Xpeng’s co-president, argued Wednesday that fierce local competition, not state support, explains China’s EV success.

More Information On EVs *GM Struggles To Be EV Success *High EV Insurance Rates The latest battle to use high tariffs to block the low prices of Chinese EVs is in Europe. The European Commission voted to approve 45% tariffs on China’s auto imports.

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.

EV tariffs won’t tackle China’s growing clout in hybrid vehicles and critical batteries, or stop trade tensions spreading to other theatres.

The European Union unleashed one of its most powerful economic tools on China, imposing tariffs on electric vehicles in a move that increases the risk of retaliatory measures and backfiring on domestic consumers and companies.

If EU tariffs are approved, Xpeng will be slapped with an additional 21.3% surtax. The brand also sees the US as an important market but can’t launch locally, at least not yet. Xpeng is open to contract manufacturing in Europe.

Options include contract manufacturing, tapping existing factories or a new assembly plant, top company official says.