By Nicoco Chan and Sarah Wu

SHANGHAI/BEIJING, July 3 (Reuters) - With the clock

ticking for the European Commission to impose provisional

tariffs on electric vehicles made in China, automakers are

bracing for billions of dollars in new costs that analysts

expect will slow their European expansion.

The bloc is set to confirm on Thursday extra duties of up to

37.6% aimed to prevent a flood of subsidised China-built EVs

into the European market, despite last-ditch efforts to strike a

deal.

"The Chinese EV brands' march into Europe will continue on,"

said Lei Xing, founder of consultancy AutoXing.

"It's like going from 80 km/h to 60 km/h or even slower, but

it's not going to stop."

China and the European Commission have been in negotiations

since last week over the curbs that Beijing and some European

automakers want scrapped. Beijing rejects accusations that

Chinese EVs are unfairly subsidised.

BYD, the world's largest EV maker, faces the

lowest tariff hike of 17.4% on top of the current 10% tariff.

State-owned SAIC's MG Motors, the most popular

Chinese-branded EV in Europe, faces the highest hike.

"For someone like BYD, 17.4%, they can absorb it," Xing

said. "It's a slight bump on the road. But for MG - for SAIC

Motor - it's a major bump."

EU countries are wavering over whether to back additional

tariffs on Chinese-built electric vehicles, highlighting the

bloc's challenge in building support for its largest trade case

yet as Beijing threatens wide-ranging retaliation.

The tariffs, set to be finalized in November, would be

blocked if a "qualified majority" of at least 15 countries

representing 65% of the EU population votes against them.

Industry insiders say both Europe and China have reasons to

push for a deal to avoid the addition of billions of dollars in

new costs for Chinese EV makers.

"I think the incentive right now that Europe is inviting to

occur is for Chinese companies to consider avoiding the tariff

by locating some of their productive capacities closer to the

European region," said Bill Russo, founder and CEO of

consultancy Automobility Ltd.

"The immediate impact is it will force companies that are

using made-in-China exports as their business model to

reconsider that strategy and to localize more or to push some of

that capacity outside of China in the direction of the markets

that they're serving."

Chinese carmakers, which command a 30% or more cost edge

over European rivals, took 19% of Europe's EV market last year,

up from 16% in 2022, according to research firm Rhodium Group.

Some are already shifting manufacturing to Europe. Chery

Auto, China's largest automaker by export volume, has

signed a joint venture with Spain's EV Motors to open its first

European manufacturing site in Catalonia.

BYD, the biggest rival to Tesla, is also building

its first European EV production base in Hungary.

However, there may not be a strong business case for some

Chinese EV makers to set up production in Europe, given their

cheaper, more efficient supply chains back home and sales

volumes too low to justify the cost of a factory.

The simplest response for Chinese automakers is to increase

the European sticker price for their EVs, said Yale Zhang,

founder of Shanghai-based Automotive Foresight.

"If you don't raise the price, I'm afraid the profit will be

negative," Zhang said, referring to companies that produce EVs

set to be hit with the highest tariff.

"You have to reposition the pricing, and that will

definitely impact sales," he said.