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.

Despite opposition from Germany, the European Union will start imposing tariffs as high as 45 percent on Chinese-made electric vehicles. Elon Musk’s marque takes the smallest hit.

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.

According to Gu, Xpeng wants to be a leader in Europe and needs to prioritize the needs and wants of local customers. For example, European buyers consider good navigation tools as more desirable than the multimedia functions that Chinese buyers want.

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

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.

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