German automakers warn of tariffs on the import of electric cars from China to the EU, fearing retaliation

Last year, the European Commission (EC) began investigating the subsidization of electric car production in China, which could lead to the imposition of additional import duties. “We don’t think our industry needs protection,” said BMW CEO Oliver Zipse. According to him, by introducing new tariffs, the EU could “shoot itself in the foot”.

Zipse pointed out that doing business on a global basis gives big automakers an advantage. “You can easily jeopardize this advantage by introducing import tariffs,” he added.

BMW imports Mini brand electric cars and BMW iX3 electric cars from China to Europe. In addition, China is BMW’s second largest market after Europe, accounting for almost a third of the automaker’s total sales in the first quarter.

China is also very important for Volkswagen. “I don’t believe in tariffs. I want everyone to compete on equal terms,” ​​said Thomas Schäfer, head of VW’s main brand. “There is always some retaliation (in response to the imposition of import duties),” he added.

The introduction of additional duties could have a negative impact on compliance with the new EU emission standards. To meet these standards, automakers will have to sell more electric cars, the production of which depends on Chinese raw materials for batteries, Reuters points out.

“Without components from China, there will be no cars in the EU,” Zipse said. He added that introducing tariffs would thwart plans to put the EU at the forefront of reducing carbon emissions. “Without resources from China, there will be no Green Deal in Europe,” Zipse said.

The European Commission should complete the investigation in November, but could impose provisional duties as early as July, writes Reuters. EC President Ursula von der Leyen said the EU must take action to prevent China from flooding the EU market with subsidized electric cars.

In a recent report, the Rhodium Group predicted that the EC would impose tariffs ranging from 15 to 30 percent on imports of electric cars from China. “Tariffs in the range of 40 to 50 percent would probably be needed to make the European market unattractive for Chinese electric car manufacturers,” she added, however.

According to the FT, the value of imported electric cars made in China to the European Union reached 11.5 billion dollars (roughly 270 billion CZK) last year. It has thus increased from 1.6 billion dollars in 2020. The data includes, in addition to cars of Chinese brands, also cars of foreign brands manufactured in China.

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