This week, the EU is anticipated to reveal its tariff strategy for Chinese electric vehicles.

• The European Union is predicted to disclose preliminary tariff rates for Chinese electric vehicles this week.
• On Monday, Citi analysts predicted that the tariff rate could increase to 25-30% from the current 10%, while their risk scenario suggests a possible hike of 30-50%.
• According to Anthony Sassine, senior investment strategist at KraneShares, on CNBC's "Squawk Box Asia" Tuesday, Chinese automakers are establishing factories in Europe, providing alternatives and likely back channels.

The European Union is set to unveil its tariff plan for Chinese electric vehicles this week, as the union tightens its stance on low-cost, subsidized imports.

The EU will temporarily increase the 10% duty on imported EVs, specifically targeting Chinese models, starting from July 4.

On Monday, Citi analysts predicted that the tariff rate could increase to 25-30% from the current 10%, while their risk scenario suggests a possible hike of 30-50%.

According to Anthony Sassine, senior investment strategist at KraneShares, on Tuesday, he anticipates tariff rates to be "between 10% and 20%." However, after the European Parliament elections last week, he believes it could be "on the higher end of the 20%."

Ursula von der Leyen, the European Commission president, observed her party, the European People's Party, gaining seats on Sunday. Von der Leyen has advocated for a "de-risking" approach from Beijing.

The EU launched an investigation in October into subsidies provided to EV manufacturers in China, claiming that such subsidized imports posed a threat to the EU's EV industry.

Although Chinese manufacturers are highly efficient and advanced, tariffs like this may not significantly affect their pricing, as they will still be more competitive than their EU counterparts, according to Sassine on CNBC's "Squawk Box Asia" on Tuesday.

The Chinese government's incentives and support have led to a boom in China's EV industry, but this has raised concerns about overcapacity from authorities in the U.S. and Europe.

In March, U.S. Energy Secretary Jennifer Granholm warned that China could flood the U.S. electric-vehicle market with its offerings, after President Joe Biden raised similar concerns. The U.S. had already announced stiff new tariffs in May, with the Biden administration hiking tariffs on Chinese EV imports to 100%, up from 25%.

On June 8, Turkey reportedly declared that it would impose a 40% tariff on vehicles imported from China.

Expanding in Europe

Despite the ongoing EU probe, Chinese EV makers Xpeng and BYD displayed their models in Europe last month, while Nio opened a new showroom in Amsterdam.

In December, BYD announced plans to construct a new factory in Hungary, while Chery formed a joint venture with Ebro-EV Motors in April to develop new electric vehicles.

Nestorovic, a professor of geopolitics at ESSEC Business School, stated that numerous Chinese manufacturers are currently searching for opportunities in the EU.

Nestorovic stated on CNBC's "Street Signs Asia" on Monday that they will make an effort to steer clear of tariffs of any kind.

Sassine of KraneShares stated that Chinese automakers are establishing factories in Europe, including Nio considering Hungary as a potential location. This presents options, and there are likely back channels being discussed.

Sassine stated that while it may not be a significant issue in Europe, it is a different matter in the U.S.