Automotive News Europe — 2026-02-10
Automotive Industry
The European Union will exempt one of Volkswagen Group’s China-built electric vehicles from hefty import duties, the first car to get approval under a new mechanism aimed at thawing trade tensions.
The European Commission said it accepted an application from Volkswagen (Anhui) Automotive Co. to sell the Cupra Tavascan compact SUV at or above a proposed minimum import price.
VW has also committed to an import quota and will invest in significant battery EV-related projects in the EU, according to a Commission statement. In return, VW will not need to pay the 20.7 percent countervailing tariff imposed on the model since 2024.
The Tavascan has been subject to the extra 20.7 percent charge on top of an existing 10 percent duty since the EU imposed fresh duties on Chinese-made battery-electric vehicles in 2024. The higher tariff was imposed to counter what the EU said were unfair Chinese government subsidies to EV and battery makers in China.
The Commission’s decision was dated Feb. 9 and appeared in the EU’s official journal.
For VW, which is pouring billions of dollars into the Anhui facility where the Tavascan is made, the exemption is likely to bolster margins that had been eroded by original tariff structure. Seat/Cupra reported a 96 percent drop in operating profit to €16 million ($18.9 million) in the first nine months of 2025, hit by tariffs on the Tavascan.
Sales of the Tavascan, which entered the market in late 2024, were 36,000 last year, accounting for around 11 percent of Cupra’s total deliveries.
Chinese brands exporting to Europe may benefit
VW’s deal is the first under the EU’s new miniumum pricing framework that allows carmakers to apply for tariff exemptions for every Chinese-made EV model they wish to import, and offers a potential road map for other automakers such as BYD that are looking to ship more cars to Europe.
China’s Chamber of Commerce said Chinese EV makers are considering whether to submit their own price undertaking proposals, adding it hoped the EU would treat Chinese companies on an equal footing.
“Given that Chinese companies’ exports to the EU are often more complex and involve multiple models and business structures, we encourage the Commission to maintain close and constructive communication with companies to ensure that the arrangements are practical and predictable,” it said.