The Tamesis
The European Commission on Monday proposed conditions under which companies making electric vehicles in China could avoid EU tariffs.
The European Commission said companies must commit to selling cars at an agreed minimum price, and the EU will also consider Chinese investment in electric vehicles in Europe. Pricing mechanism guidance.
For Beijing, electric vehicle tariffs of up to 35.3% are the biggest source of trade tensions with the EU, while Brussels is keen to protect the European auto industry from an influx of cheap imports made by the likes of BYD, SAIC Motor and Geely.
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The two sides held a series of talks to seek alternatives to the tax.
China backs producers’ minimum price commitments and the European Commission said it had issued written guidance on how to replace tariffs with minimum prices after talks with China’s Commerce Ministry.
Prices must eliminate subsidy effects
EU executive still demands any prices on offer be eliminated The harmful effects of subsidieshave effects commensurate with responsibilities, be practical and minimize cross-compensation.
China has previously pushed for broadly applicable minimum prices. But the new guidelines require a minimum price for each electric car model and configuration, referring to the sales price to the first independent consumer in the EU.
The guidance suggests that it will be more difficult to accept commitments from companies selling other vehicles, such as hybrids, into the EU due to the risk of cross-compensation.
In the first three quarters of 2025, China’s imports of hybrid vehicles into the EU were five times higher than the same period last year.
The guidance also says the risk of cross-compensation will be reduced if the offer includes a volume commitment or applies for a limited period.
committee started Review of last month’s lowest price and import quota offer from Volkswagen to replace tariffs on its Cupra Tavascan electric SUV produced in China.
China’s Ministry of Commerce generally welcomed the guidance, saying the EU’s insistence on non-discrimination and objective assessment showed that the two sides could resolve differences through dialogue.
- Reuters Additional input and editing by Jim Pollard
See also:
China cancels battery export tax rebate: lithium prices soar
BYD struggles at home, but record overseas sales help it beat Tesla
As exports boom and priorities shift, China’s EV subsidy era may be over
Chinese companies may soon need to transfer technology to invest in Europe
China’s export of rare earth magnets is “increasingly difficult”
Overseas investment by Chinese electric vehicle companies exceeds domestic investment for the first time
EU says Chinese electric cars are subsidized and plans to retroactively impose tariffs
Chinese electric car companies find way to circumvent EU tariffs – sell hybrids
EU rejects China’s proposal for minimum selling price of electric cars of 30,000 euros
