China indicators off on particular person OEM negotiations with EU

On 12 February, China’s Ministry of Commerce shifted its stance by accepting that Chinese language automakers can embark on impartial negotiations with the EU on their electrical automobile (EV) imports. The change in place comes simply days after Volkswagen Anhui grew to become the primary automaker to safe a duty-free fee for the Cupra Tavascan SUV as a part of the bloc’s new particular person worth minimal coverage various to tariffs.

“It’s hoped that extra Chinese language corporations will attain agreements with the European aspect on worth commitments,” stated Ministry of Commerce Spokesperson He Yadong stated at one of many ministry’s regularly-scheduled information conferences. an everyday information convention. Beijing had beforehand urged Brussels to not interact in separate talks with Chinese language automakers, regardless of EU-side allowances automakers to use for tariff exemptions on particular China-made EV fashions.

He emphasised that China is prepared to take care of communication with the EU and that “each side assist Chinese language EV makers to make good use of worth undertakings”.The European Fee authorized Volkswagen Anhui’s request to exempt the Tavascan SUV from a 20.7% countervailing responsibility on 10 February, though the ten% base fee nonetheless applies. The association is available in change for an agreed minimal worth and gross sales quota, marking the primary such exemption because the bloc imposed tariffs in 2024. Volkswagen additionally dedicated to import quotas and EV battery-related investments within the bloc.

China’s Chamber of Commerce to the EU stated that some Chinese language EV makers are already contemplating submitting their very own worth enterprise proposals, expressing hope for equal therapy to their European counterpart. The chamber beneficial sustaining shut communication with corporations to make sure that the preparations stay sensible and predictable, noting that Chinese language exporters typically handle a number of fashions and complicated enterprise buildings.

For China, the tariff exemption mechanism represents a preferable various to the tiered responsibility construction first imposed again in 2024, which varies considerably by automaker and is locked in place for 5 years. Tesla secured the bottom fee at 7.8% as a result of it cooperated extensively with EU investigators and was proven to have obtained meaningfully fewer subsidies than home Chinese language gamers. For distinction, BYD faces 17%, Geely 18.8%, and SAIC a most 35.3% penalty for failing to cooperate with EU investigators.

The brand new framework successfully creates three pathways for affected automakers: paying the tariff, making an attempt to hash out worth minimal, or manufacturing in Europe to bypass the duties solely. Tesla has remained quiet on worth undertakings, seemingly as a result of its sub-10% tariff creates much less stress to simply accept minimal pricing. Merely paying the present responsibility may show less expensive than negotiating a less-than-desirable worth flooring.

Chinese language automakers captured over 10% of Europe’s EV market in 2025. Most Chinese language manufacturers sometimes priced automobiles at or simply beneath established European fashions somewhat than competing on value, absorbing tariffs to take care of their margins.