German car industry opposes EU tariffs on Chinese EVs

The German automotive industry on Thursday opposed the European Union's (EU) punitive tariffs on electric vehicles (EVs) from China, set to take effect on Friday.

Additional tariffs of up to 37.6 percent will be introduced provisionally while talks with China continue. A final decision on the tariffs will be made by early November. Until then, importers must deposit guarantees equivalent to the potential duties.

The extra duties "are not suitable for strengthening the competitiveness of the European automotive industry," Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), told Xinhua in a written interview.

This position is shared across the German automotive sector. Michael Schumann, chairman of the Board of the German Federal Association for Economic Development and Foreign Trade, echoed the VDA's sentiments.

"Our position on the EU's punitive tariffs on Chinese electric cars has not changed," he told Xinhua. "We vehemently and resolutely reject them and in doing so are in agreement with the entire German automotive industry, some of which is itself affected by these tariffs."

He urged both sides to resolve the conflict before the punitive tariffs take effect, emphasizing that it is in the interests of Europe's environmental goals and consumers that the EU has access to affordable e-mobility, where China is a leader.

Individual vehicle manufacturers in Europe are also skeptical of the proposed tariffs. German car producer Mercedes-Benz emphasized the importance of free and fair trade. "If a general trend towards protectionism gains a foothold, this has negative economic consequences for all stakeholders involved," the company told Xinhua.

Mercedes-Benz's domestic competitor BMW also criticized the EU's move. "The introduction of additional import duties leads to a dead end," Oliver Zipse, chairman of the Board of Management of BMW AG, said in a statement to Xinhua.

As part of its Green Deal plans, the EU aims to become climate-neutral by 2050 and reduce greenhouse gases by at least 55 percent by 2030 compared to 1990 levels. The bloc is focusing heavily on expanding electric transportation.

The EU's punitive tariffs risk destabilizing these goals, slowing the decarbonization of the transport sector, and limiting consumer choice, which Zipse classified as an infringement of the EU's founding principles.

New registrations of battery-electric vehicles (BEVs) in the EU are already declining. According to the European Automobile Manufacturers' Association (ACEA), only 114,308 such cars were registered in May, a decrease of 12 percent year-on-year. Their market share fell from 13.8 percent to 12.5 percent in the same period.

Historically, the EU has benefited from its openness to international trade, with Germany generating a considerable surplus in automotive trade with China. According to the VDA, last year, Europe's largest economy exported cars and parts valued at 26.3 billion euros ($28.4 billion) to China, while imports from China amounted to 6.8 billion euros.

The potential damage from the extra duties now provisionally imposed "is likely to outweigh the potential benefit of increasing market isolation for the European-and especially the German-automotive industry," warned VDA president Mueller.

Schumann cautioned the EU against basing their decisions on ideological motives, urging Brussels to act "according to the true needs of the people."