Posted on 10 May 2024
German carmaker Volkswagen has warned the European Commission that higher tariffs on China-made electric car imports could backfire.
Speaking at the FT Future of the Car summit on Wednesday, Thomas Schäfer, chief executive of Volkswagen Passenger Cars, said increased tariffs on Chinese BEV imports could potentially lead to retaliation. He suggested that Beijing could act against international brands in China, such as Volkswagen, BMW and Mercedes-Benz.
“There is always some sort of retaliation,” he told the event.
The Volkswagen Group has been pushing for localisation in China with production meeting both domestic and export demand. Under its latest partnership with a local player, Volkswagen will build two new BEVs with smart EV manufacturer Xpeng.
While acknowledging VW is unlikely to recover its once-dominant position in the “tough market” of China, Schäfer also noted the company is “big enough, important enough for China and localised enough in China so there is no reason why we can’t follow the speed.”
The EU is studying whether to increase import duties on China-made all-electric cars to ensure competition fairness. It claims the price of Chinese electric cars is kept “artificially low by huge state subsidies” and this is distorting the EU market. A decision on the ongoing anti-subsidy investigation is expected in November, though higher tariffs could be seen as early as July, Kallanish understands.
Some EU market players call for tariffs to be increased from the current 10% to at least 25%, while others target a 50% duty. European EV manufacturers are subject to a 15% import tariff in China and a 27.5% duty in the US.
Beijing has rejected the EU’s claims on state subsidies and called authorities in Brussels to ensure free trade conditions remain. During China’s President Xi Jinping state visit to France earlier in the week, both Beijing and Paris vowed to “seek harmony in diversity.” Though official talks did not focus on EVs, the head of states called for “fair competition.”
Xi also strengthened ties with Hungary and Serbia, European countries where Chinese battery and EV manufacturers are building production capacities.
Source:Kallanish
