Chinese electric vehicles will remain competitive in Europe despite the EU’s additional tariffs on autos made in the country, particularly after they were revised lower last month.

In the latest tariff revisions at end August, BYD, China’s behemoth automaker, saw tariffs cut to 17% from 17.4%, Geely to 19.3% from 19.9%, and SAIC saw a reduction to 36.3% from 37.6%.

To make the European market unattractive for Chinese EV exporters, tariffs have to be as high as 50%, according to research group Rhodium. It said that number might need to be even higher for vertically integrated manufacturers such as BYD.

The current tariffs will not be a significant deterrent to China’s EV-makers, said Joseph McCabe, president and CEO of global auto research company AutoForecast Solutions. “Tariffs on Chinese-made EVs will create a hurdle, but not a barrier to entry,” he added.

He pointed out that the EU’s tariffs were not as severe as those announced by North America because European and Chinese original equipment manufacturers are heavily interconnected. The U.S. announced a 100% tariff on Chinese EVs in May this year. Canada followed suit last month.

“It is a delicate balance to promote domestic European production without severely impacting their Chinese operations,” McCabe said.

Chinese EV makers are coming up with newer, cheaper offerings even as the EU strives to curtail imports via tariffs.

At a conference in May this year, Chinese behemoth BYD announced its Dolphin model to the European market at less than $21,550. The model is a rebrand of the Chinese Seagull model.

In comparison, Western EV-maker Tesla’s Model 3, the brand’s cheapest offering, is being sold for $44,480 in the United Kingdom. Electric vehicles made by Tesla in China also face a 9% tariff on imports to the EU.

Even with the 17% levy, BYD’s Dolphin model will still be about $23,270 cheaper than the China-imported Tesla Model 3.

To better compete with fierce Chinese rivals, German brand Volkswagen has announced plans to develop a low-cost electric vehicle for the European market at a comparable price of around $21,476 by 2027.

“Now, profitability takes a back seat to market share. The investment community rewards new, innovative EV players on the promise what they could be rather than short-term financial performance that legacy manufacturers are measured,” said McCabe.

“If they really have to kill the EV industry in China, they have to put in 300% of tariffs … which, you know, doesn’t make sense from my perspective,” William Ma, CIO of GROW Investment Group told CNBC’s “Street Signs Asia” on Tuesday.

If the Chinese original equipment manufacturing sector is affected, the risk of retaliatory tariff measures from China against Europe is high, McCabe warned.

EU tariff talks started in June as a response to “unfair subsidies” to Chinese EV makers, which pose “a threat of economic injury” to European EV counterparts.

“This geopolitical or sanction will not go away easily for the next year or two,” Ma said.

Asia-Pacific markets were higher Friday with Japan’s Nikkei 225 leading gains, after Wall Street soared overnight following the Federal Reserve’s outsized rate cut.

The Bank of Japan kept its benchmark interest rate steady at around 0.25% — the highest rate since 2008 — at the conclusion of a two-day meeting Friday. 

Japan’s core consumer price index climbed 2.8% year on year, in line with Reuters estimates, versus a 2.7% rise in the previous month. Excluding fresh food and energy, inflation came in at 2%, versus 1.9% in the previous month.

The Japanese yen firmed 0.30% against the greenback to 142.20.

China also did not tinker with its key lending rates, with the one-year loan prime rate — which affects corporate and household loans — at 3.35% and the five-year LPR — a reference for mortgage rates — at 3.85%. 

Japan’s Nikkei 225 added 1.53% to close at 37,723.91, logging weekly gains of over 3%.

The broad-cased Topix gained 0.97% to 2,642.35.

Hong Kong’s Hang Seng index was up 1.27% as of its final hour of trade.

Mainland China’s CSI 300 edged 0.16% higher to 3,201.05, wrapping up the week with gains of 1.3% after hitting its lowest level since January 2019 last Friday.

South Korea’s Kospi gained 0.49% to finish at 2,593.37 and the small-cap Kosdaq rose 1.19% to 748.33.

Australia’s S&P/ASX 200 edged up 0.21% to end at 8,209.5.

Overnight in the U.S., all three major indexes ended higher with the Dow Jones Industrial Average rising 1.26% to close at 42,025.19, crossing the 42,000 threshold for the first time.

The S&P 500 added 1.7% to end at 5,713.64, topping 5,700 for the first time.

The Nasdaq Composite surged 2.51% to finish at 18,013.98.

The three major averages are on pace for weekly gains, with the S&P 500 up nearly 1.6% through Thursday’s close. The Dow is toting a 1.5% jump on the week, while the Nasdaq is outperforming with a 1.9% advance.

—CNBC’s Lisa Kailai Han and Hakyung Kim contributed to this report.

Asia-Pacific markets rose in choppy trading Thursday, as investors assessed the Federal Reserve’s decision to cut interest rates by a half-percentage point.

Japan’s Nikkei 225 rose 2.49%, while the broad-based Topix climbed 2.34%. The Japanese yen weakened 0.68% to 143.24 against the U.S. dollar.

The Fed lowered its benchmark borrowing rate by a half percentage point, bringing its target range to 4.75% to 5%.

In lockstep with the Fed, the Hong Kong Monetary Authority cut its interest rate by 50 basis points to 5.25, as the city’s currency is pegged to the greenback.

Hong Kong’s Hang Seng index climbed 1.20%. Hong Kong-listed shares of property developer China Vanke rose 7.4%.

Mainland China’s CSI 300 was 1.29% higher, led by real estate stocks up nearly 4%.

South Korea’s blue-chip Kospi slipped 0.30% after opening higher, while the small-cap Kosdaq climbed 0.11%.

Australia’s national seasonally adjusted unemployment rate remained steady in August at 4.2%, according to Australian Bureau of Statistics, in line with Reuters-polled analysts’ expectation, while employment additions at 47,500 surpassed estimates of 25,000 additions.

Australia’s S&P/ASX 200 rose 0.35%.

New Zealand’s GDP for the second quarter contracted by 0.2% from the previous quarter, according to the official data released Thursday morning, less than Reuters poll estimates of a 0.4% decline.

Bank of Japan is poised to kick off a two-day meeting ending Friday, where the central bankers will make a key rate decision, after the central bank ended its decades-long ultra-low interest rates regime earlier this year.

Taiwan’s central bank is set to make a key rate decision Thursday, and release its revised economic growth and inflation forecasts for this year.

The Taiwan Weighted Index rose 1.01%.

Overnight in the U.S., all three major indexes fell, with the Dow Jones Industrial Average down 0.25% to 41,503.1, while the S&P 500 fell 0.29% to end at 5,618.26. The Nasdaq Composite fell 0.31% to 17,573.3.

The Dow Jones Industrial Average and the S&P 500 surged to fresh highs during intraday trading before reversing course to close lower.

—CNBC’s Hakyung Kim and Samantha Subin contributed to this report.

Asia-Pacific stocks traded mixed on Tuesday with Japan’s Nikkei 225 dropping over 2%, as investors awaited for the Federal Reserve to kick off its monetary loosening cycle.

Japan’s Nikkei 225 declined 2.06%, while the Topix was down 1.8% as the yen strengthened for a sixth straight session, last at 140.40 against the dollar.

The yen strengthened to 139.58 yen overnight, its weakest level since July 2023.

The Fed is expected to announce its first interest rate cut since March 2022, but markets are split over the size of the reduction from the two-day policy meeting which begins Tuesday.

U.S. retail sales data is also set to take center stage as investors monitor the health of the consumer in the lead up to the Fed’s meeting.

Traders in Asia will also parse Singapore’s non-oil domestic exports for August, which rose 10.7% from a year ago, official data showed Tuesday, while falling 4.7% from the previous month. The figures compare with a Reuters forecast of a 15% year-on-year expansion and a 3.3% month-on-month drop.

Tuesday’s economic data also includes India’s wholesale prices for August, which are anticipated to have gained 1.85% year-on-year, a cooler reading than 2.04% in July.

Shares of Chinese appliance maker Midea Group surged over 9% in their Hong Kong debut from its offer price of HK$54.80 apiece. This is the city’s largest listing in more than three years.

Hong Kong’s Hang Seng index climbed 1.1%. Australia’s S&P/ASX 200 rose 0.24%.

South Korea, mainland China and Taiwan’s markets were closed for a holiday.

Overnight in the U.S., the Dow Jones Industrial Average rose 0.55% to a new record high at 41,622.08, tracking the rise in the S&P 500 which was up 0.13% settling at 5,633.09. If its momentum holds up, the broad-based index could notch a new all-time this week.

Meanwhile the Nasdaq Composite lost 0.52% to finish at 17,592.13, weighed down by tech stocks.

—CNBC’s Hakyung Kim and Pia Singh contributed to this report.

When Carmelita Fernandes, who lives in the Indian city of Pune, first made the switch from her regular car to an electric Tata Nixon in December 2021, she was excited for the journeys that would follow. After all, it was a “five-star rated car and sales were really skyrocketing in India” at the time, she said.

A little over two years after the switch, Fernandes regrets her decision: “I’ll never ever buy an electric vehicle again.”

In the first five months after the purchase, Fernandes’ car battery died halfway when she was on a 180-kilometer (111 miles) drive from Pune to Mumbai, two cities in the western state of Maharashtra.

The battery of the EV SUV that cost her 1.4 million Indian rupees ($16,700) tended to deplete faster than expected. “A 40% charge should easily take me for another 40km, but it dropped to 0% within 5km,” Fernandes said.

“If I can’t drive for four to five hours from Mumbai to Pune, I don’t think I can use the EV anywhere. It’ll be impossible to go to further cities like from Mumbai to Goa which are about 600km away from each other,” she told CNBC.

Fernandes’ story is not unique. In India, “Range anxiety” remains a significant hurdle preventing drivers from making the transition from internal combustion engine to EV cars, analysts said.

The world’s most populous country has an ambitious goal for 30% of newly registered private cars to be electric by 2030. However, out of around 4.2 million passenger vehicles sold last year, less than 2.5% were EVs, according to Bain & Company, an industry consulting firm.

“Charging infrastructure in India’s electric vehicle market is still not fully developed, but companies want more vehicles on the road before they invest more. On the other hand, potential electric vehicle buyers first want more chargers on the road,” said Brajesh Chhibber, partner at McKinsey India.

“It’s a chicken-or-egg problem on which should come first,” Chhibber told CNBC.

As of August 2023, Tata Motors dominated 72% of India’s EV market, followed by MG Motors with with a 10.8% share. EVs from Mahindra & Mahindra, Citroen, BYD, Hyundai and Kia make up the rest of the market, data from Canalys showed.

Boosting India’s charging infrastructure is a vital step that the government needs to take to reach its goal of making electric vehicles widespread by 2030, industry experts told CNBC.

After the U.S., India has the world’s second-largest road network, spanning 6.3 million kilometers.

However, as of February, there were roughly 12,100 public EV car chargers in the world’s most populous country, still far from the 1.32 million chargers needed by 2030.

But charging companies are hesitant to scale up infrastructure for fear that they would be underutilized, said Mihir Sampat, partner at Bain & Company in Mumbai.

“The economics of running a charging point station are fundamentally driven by how much your chargers are utilized,” Sampat said. “You ideally want chargers to be utilized at least 15-20% of the time. And for that, chargers need to be in an area with a dense EV population.”

There are around 200 EVs per commercial charging point in India, as compared to approximately 20 in the U.S. and less than 10 in China, according to a report published by Bain in December of last year.

Fernandes recounted how she would stop at the Khalapur Toll Plaza, on the Mumbai-Pune expressway, during her trips from Bombay to Pune to charge her EV. The chargers had to be booked long in advance or she couldn’t use them in a timely manner.

“It would sometimes ask me to wait for more than two hours to charge my car,” she said. “I end up using more power and wasting my battery by looking for a charger.”

Although the Indian government has made significant strides to increase the number of EV chargers on highways, infrastructure for intercity usage near shopping malls and office buildings need to be ramped up too, McKinsey’s Chhibber added.

A lack of charging infrastructure is not the only problem EV drivers are facing. High costs and low variety in models are two other factors keeping drivers from making the switch from ICE to EV cars, analysts said.

Maurti Suzuki, India’s largest carmaker, will only be releasing its first EV car model next year. While Tata only offers five EV car models, and MG Motors offers two, the company’s websites showed.

“Customers are pushing back on making the switch to EVs and are waiting for new products and a wider portfolio to come,” Chhibber said.

“India remains a very price sensitive four-wheeler market. Companies are going to have to develop lower cost EVs that are comparable to ICE cars,” Bain & Company’s Sampat said, adding that battery costs first need to come down.

The price of one of Tata’s Punch, one of its most popular ICE SUVs, start at 612,900 Indian rupees ($7,300), compared to its EV counterpart with a starting price of 1.1 million Indian rupees ($13,100)