Autmotive News Europe — 2024-10-03
Automotive Industry
Germany on 4 October will vote against the introduction of European Union tariffs on Chinese electric vehicles, people with knowledge of the matter told Reuters.
Germany abstained in a first non-binding vote in July on the European Commission's proposal to impose the tariffs, but since then industry has pressured German Chancellor Olaf Scholz to vote against the measure in Friday's vote by EU member states.
The commission's proposal can be implemented unless a qualified majority of 15 EU members, representing 65% of the EU population vote against it, in what is a very high hurdle. Reuters reported on Wednesday that France, Greece, Italy and Poland will vote in favor, which would be enough to push through the tariffs.
A German government spokesperson declined to comment.
Sweden, home of Volvo Cars which is owned by China's Geely, said it will abstain in the vote.
"Sweden's line is that the best thing would be that China and the EU together can come to an agreement in relation to this problem," said the country's minister for foreign trade Benjamin Dousa.
In the absence of a qualified majority either way, the EU executive can adopt the tariffs. However, it could also submit an amended proposal if it wanted to secure greater backing.
Spain said on 3 October that the EU should seek a compromise and a negotiated outcome with China. "There is a lot at stake for our domestic industry," Economy Minister Carlos Cuerpo said in a letter to the European Commission Vice President Valdis Dombrovskis.
Cuerpo noted that Spain is the EU's second-largest car producer.
China's Chery Automobile plans to build its Omoda 5 EV in Nissan's former Spanish plant in Barcelona but has pushed back the production start date by 12 months to October 2025 while it assesses the impact of the tariffs, according to people familiar with the matter.
Retaliation fears
German automakers Volkswagen, BMW and Mercedes-Benz, which all made a third of their sales last year in China, oppose the tariffs. They worry about retaliation measures and fear a trade conflict with the country's second most important trading partner.
IG Metall, the powerful German labor union, and employee representatives of the nation's major carmakers said in a statement on 3 October that Germany should vote against the tariffs. "We say unequivocally: tariffs are the wrong approach because they will not improve the competitiveness of the European automotive industry," they said in a joint statement.
EU officials say duties are needed on Chinese EV imports to counter cheap loans, land and raw materials and other subsidies and the goal is a level playing field, not shutting Chinese automakers out.
The commission says China's spare production capacity of three million EVs per year, which needed to be exported, is twice the size of the EU market. Given 100% tariffs in the U.S. and Canada, the most obvious outlet for those EVs is Europe.
Other options
The commission has said it is willing to continue negotiating an alternative to tariffs with China and could re-examine a price undertaking involving a minimum import price and typically a volume cap.
One option under negotiation is minimum import prices calculated using criteria such as the range, battery performance and length of the EV, along with whether it is two- or four-wheel drive, a source familiar with the matter said.
The tariffs range from 7.8% for Tesla to 35.3% for SAIC and other companies deemed not to have cooperated with the EU investigation. These tariffs are on top of the EU's standard 10% import duty for cars.