EU introduces strict tariffs on Chinese e-cars – a complex game on the global stage

The negotiations between the EU and China regarding the pricing of electric vehicles (EVs) in Europe have reached a new peak. Despite an offer from the Chinese government to provide EVs at a minimum price of 30,000 euros, the EU decided to implement stricter tariffs. This decision is based on the results of a comprehensive investigation by the European Commission, which identified anti-competitive, state-supported subsidies. EU member states have now voted for additional tariffs of up to 35.3% on Chinese EV imports. This pushes the total tariffs for some manufacturers close to the 50% mark. Germany and Hungary voted against this measure due to fears of potential countermeasures, while 12 other members, including Spain and Sweden, abstained. The EU rejected the Chinese offer of a price floor in September, as it could not significantly mitigate the disadvantages caused by subsidies. In comparison, the average price of a European EV is around 66,000 euros, according to studies by JATO Dynamics. Chinese automakers like BYD continue to benefit from lower production costs and strong control over the entire battery supply chain. European automakers are planning their own cost-effective models in response to Chinese competition, such as Volkswagen's 20,000-euro entry-level EV, which is expected to launch in 2027. Partnerships, such as Volkswagen's investment in Xpeng, underline the growing importance of the Chinese market. After the vote, Germany’s Finance Minister Christian Lindner warned the EU Commission against a trade war with China. The final decision on the implementation of tariffs now rests with the European Commission. China has already taken initial steps towards retaliation with tariffs on European imports, starting with pork and cheese.