Automotive News Europe — 2024-10-09
Automotive Industry
The European Commission dismissed minimum price offers from EV makers in China a month ago as part of an anti-subsidy investigation.
The European Commission rejected a proposal by the Chinese government for imported battery-electric vehicles made in China to be sold at a minimum price of €30,000 ($32,000), three sources told Reuters, a move Beijing hoped would stop the EU from imposing punitive tariffs.
The commission dismissed minimum price offers from EV makers in China a month ago (September 2024) as part of an anti-subsidy investigation that has thrown Beijing and the European Union into their biggest trade dispute in a decade.
Specific details of the compromises being offered in negotiations between the two have not previously been reported.
In rejecting the minimum pricing proposal, Brussels said at the time that the new tariffs were not only about the prices Chinese automakers charge in Europe, but also about the state subsidies the companies received to build EVs in China and removing the impact of such support payments.
The Chinese proposal would have seen makers of EVs in China agreeing to respect certain pricing thresholds to avoid flooding the European market with cheap vehicles the bloc says local rivals cannot compete with.
Currently, Chinese carmakers such as SAIC's MG Motor and BYD are pricing their EV models just above €30,000 in Europe even though they sell them at a fraction of the price in their home market, highlighting their flexibility but also the appeal for them in selling in Europe.
BYD's Seagull, a smaller EV slated to come to Europe next year, is expected to be priced just under €20,000.
A solution could be an individually calculated minimum price for each carmaker and possibly per model type, depending on size of car and its range, the sources said. One of the sources said that minimum price levels of 35,000 to 40,000 euros would serve as a better yardstick for talks
The commission's proposal to impose higher tariffs on Chinese-made electric vehicles obtained the necessary support from member states in a vote on 4 October 2024.
After the vote, the commission said it would continue negotiations with China in parallel to explore an alternative solution to the tariffs.
The higher tariffs will be imposed from 31 October 2024 for five years unless both sides agree on a Plan B.
On Tuesday, 8 October 2024, China imposed temporary anti-dumping measures on imports of brandy from the EU, hitting French brands including Hennessy and Remy Martin, days after the 27-state bloc voted for the EV tariffs.
China's Commerce Ministry has previously said it was looking to negotiate an alternative to tariffs that would involve some form of "flexible pricing commitment." It did not provide details.
The European Commission has said it is prepared to re-consider other price undertakings, involving minimum prices and import quotas, as negotiations continue.
The EU's new tariffs on China-built electric vehicles range from 7.8% for Tesla, which is low because the company gets few subsidies in China, to as high as 35.3% for automakers that did not cooperate with the EU's anti-subsidy probe.
When the existing 10% tariff applied to imports in the EU is included, the rates will be as high as 45%.