On October 4th local time, the European Union held a vote on whether to impose a five-year anti-subsidy tariff on Chinese electric vehicles. According to a statement released by the European Commission, the proposal to levy tariffs on Chinese imported pure electric vehicles received the necessary support from EU member states in the vote.

The statement indicated that the EU and China continue to work on exploring alternative solutions, which must fully comply with World Trade Organization (WTO) regulations, adequately address the damaging subsidies identified by the Commission's investigation, and be monitorable and enforceable.

In response to the EU's vote to pass the final draft of the electric vehicle anti-subsidy case, a spokesperson for China's Ministry of Commerce stated that China firmly opposes the EU's final draft but has also noted the EU's expressed political will to continue resolving the issue through negotiations. Sino-European technical teams will continue negotiations on October 7th.

Since the end of June this year, China and the EU have conducted more than ten technical consultations at the bureau level and two副部长级 consultations on the electric vehicle anti-subsidy case.

Advertisement

Information from the recent "Berlin Global Dialogue" summit held in Germany suggests that, in addition to the tariff decision, the EU and China are continuously negotiating alternative plans regarding electric vehicle prices and quotas, as well as investments.

The European Commission has previously stated its willingness to continue negotiations with China on tariff alternative plans and may re-examine price undertakings, including minimum import prices and output ceilings.

Denis Depoux, Co-CEO of Roland Berger's Global Managing Board, told First Financial Journalists: "The EU is continuing negotiations with China to reach a better solution, which includes aspects such as pricing planning, quotas, and investments for electric vehicles."

Depoux recently attended the "Berlin Global Dialogue" summit in Germany. At the conference, Mercedes-Benz Group CEO Ola Kaellenius, German Economy Minister Robert Habeck, and Xiaopeng Motors CEO He Xiaopeng debated issues related to EU tariffs.

In September, a spokesperson for the Ministry of Commerce stated that since the EU and China agreed to initiate consultations on the EU's electric vehicle anti-subsidy case on June 22nd, both sides' working teams have conducted more than ten rounds of intensive consultations. The Chinese side has submitted tens of thousands of pages of facts and evidence to the EU and has proposed flexible solutions, making great efforts. The key to the current consultations is whether the EU truly has the political will to solve the problem.

After the EU voted to pass the final draft of the electric vehicle anti-subsidy case, several European car manufacturers expressed opposition.BMW CEO Oliver Zipse called the vote result "a fatal signal for the European automotive industry." He stated that a swift compromise must be reached between China and the EU to prevent trade conflicts. Volkswagen has already indicated that the EU's taxation is "the wrong approach."

German automakers' sales to the Chinese market account for nearly one-third of their total sales, and these manufacturers are particularly opposed to the imposition of tariffs.

In a statement on October 3, German union IG Metall and representatives of major automotive manufacturers' employees said, "Germany should vote against the EU's tariffs on Chinese electric vehicles. Tariffs are the wrong approach because they do not increase the competitiveness of the European automotive industry."

French automotive group Stellantis also stated that the company supports free and fair competition.

Geely Holding expressed "disappointment" with the European Commission's decision, saying it could hinder the EU's economic relations with China and harm the interests of European businesses and consumers.

The EU's latest tax rules for Chinese-made electric vehicles are imposed on top of the previous 10% standard import tax for cars, with tariff rates ranging from 7.8% (Tesla) to 35.3% (SAIC Group), with a maximum tax rate of up to 45%.

The European Commission stated that the imposition of tariffs is to counteract cheap loans, land, and raw materials, as well as other subsidies, with the goal of creating a fair competitive environment, rather than, like the United States' plan to impose a 100% tariff, to exclude Chinese car manufacturers.

Spain's Minister of Economy Carlos Cuerpo also opposed the imposition of tariffs in a letter to the European Commission. He believes that the EU should "keep negotiations open before the vote results take effect" in order to reach agreements on issues such as the transfer of prices and battery production within the EU.