The European Union is weighing a proposal to replace planned tariffs on Chinese electric vehicles (EVs) with a minimum price agreement, according to a European Commission spokesperson.
Source: Yicai Global
The European Union is weighing a proposal to replace planned tariffs on Chinese electric vehicles (EVs) with a minimum price agreement, according to a European Commission spokesperson. Speaking on April 10, Olof Gill said the EU and China have agreed to explore setting a floor price for Chinese-made EVs—an alternative to the tariffs the EU is scheduled to impose later this year.
The move follows a virtual meeting on April 8 between China’s Commerce Minister Wang Wentao and Maroš Šefčovič, the European Commission’s Executive Vice-President for Trade and Economic Security. Both sides pledged to begin talks as soon as possible, focusing on market access, a more favorable business environment, and price undertaking negotiations for EVs. Investment cooperation in the automotive sector was also on the agenda.
“A minimum price deal is a voluntary agreement between both parties, whereas tariffs are imposed unilaterally,” said Zeng Zhilin, Director of Asia-Pacific Automotive Forecasting at GlobalData. “For carmakers, high tariffs eat into profit margins, but a price floor can help maintain profitability.”
China, home to the world’s largest EV market, has taken the lead in the global industry. According to research firm CleanTechnica, Chinese brands occupy 11 spots among the world’s top 20 EV manufacturers by sales. While European carmakers have started shifting toward electrification, most remain in early stages and are less prepared for rapid competition. China has already overtaken Japan as the world’s top auto exporter, adding to the pressure on Europe’s legacy automakers.
Wang Zhisheng, Vice President of the China Chamber of Commerce to the EU, has warned that high tariffs on Chinese EVs would push up prices, curb consumer demand, and ultimately slow the EU’s green transition. He emphasized that, given the global nature of the auto industry, the EU and China should be strengthening cooperation rather than erecting trade barriers.
That cooperation is already gaining momentum. Volkswagen has partnered with Chinese EV maker XPeng, while Leapmotor has formed a strategic alliance with Stellantis. A new wave of so-called “reverse joint ventures”—where Chinese companies play the lead role—is also taking shape.
Reproduced article do not represent the position of New Energy Era.