The Chinese government reportedly offered to sell EVs for a minimum of €30,000 in Europe to stave off eventual tariffs implemented by the EU, but the proposal still fell way below the average price of an EV in the region.
A divided EU instead voted in favor of implementing enhanced tariffs on Chinese EV imports after the European Commission’s lengthy probe found evidence of anticompetitive state-backed subsidies.
Member states voted to introduce additional tariffs of up to 35.3% on Chinese-made EVs on top of existing fees, pushing some carmakers to total tariffs of nearly 50%. Germany and Hungary voted against the tariffs, fearing retaliation, while 12 other members, including Spain and Sweden, abstained.
As part of negotiations to prevent tariffs, the Chinese government offered to set a minimum price floor of €30,000 on any EVs sold in the EU, Reuters reported, citing three people familiar with the matter.
The EU said in September that it had rejected China’s offer to set a minimum price on EVs sold in the bloc but didn’t disclose the exact conditions China offered.
“Our review focused on whether the offers would eliminate the injurious effects of subsidies and could be effectively monitored and enforced. The Commission has concluded that none of the offers met these requirements,” a European Commission spokesperson said at the time.
According to studies by JATO Dynamics, the average price of an EV in Europe is €66,000, meaning Chinese EVs would still sell for less than half the value of local rivals under the government’s proposal.
Chinese EV makers like BYD have gained market share in Europe in the past couple of years with prices European competitors haven’t been able to come close to.
In addition to competitive advantages, including lower labor costs and control of the entire battery supply chain, China was accused of propping up its carmakers with extensive subsidies.
European automakers are crafting plans to bring in their own low-cost models, with Volkwagen’s entry-level €20,000 EV slated for release in 2027.
In the meantime, European manufacturers sought to ward off the threat of Chinese competitors by linking up on supply agreements. Volkswagen bought a $700 million stake in Chinese manufacturer Xpeng last year.
These partnerships, combined with a growing reliance on the Chinese consumer market, are thought to be a primary motivation for Germany voting against the tariffs. The country, alongside Hungary, is also concerned about sparking a trade war with China.
Following the vote, Germany’s finance minister, Christian Lindner, urged European Commission president Ursula von der Leyen not to trigger a “trade war” with China. The European Commission has the final say on whether it will implement tariffs after getting the all-clear from EU member states.
China has started retaliating against EU nations with tit-for-tat tariffs on imports from the bloc. The country has launched antidumping probes on everything from European pork to blue cheese from the region.
