WionDrive News Desk 
Mercedes Benz CEO Ola Kaellenius anticipates a resolution regarding the EU’s import tariffs on Chinese electric vehicles in the near future, as he disclosed during an industry conference on Thursday. Speaking at the CAR Symposium 2024, the head of the renowned German luxury carmaker emphasized that a decision is imminent. Originally scheduled for this week, the decision was postponed until after the upcoming election in the European bloc.
The European Commission, responsible for trade policy across the 27-nation European Union, initiated an investigation in October to assess whether fully-electric cars manufactured in China were benefiting from unfair subsidies, potentially necessitating additional tariffs. Kaellenius reiterated his opposition to restrictions but acknowledged the challenge posed by certain countries supporting their domestic producers in contravention of World Trade Organization (WTO) rules.
He advocated for a strategy of trade stimulus over protectionism, particularly highlighting its importance for Germany’s export-driven economy. Mercedes, alongside fellow German automakers BMW and Volkswagen, heavily depends on revenues from the Chinese market and manufactures some of its models there.
The impending move by the European Commission to increase tariffs on Chinese electric vehicles is expected to initiate negotiations aimed at mitigating the impact on the world’s largest electric vehicle industry. The anticipated provisional tariffs, likely announced by June 5, are poised to impose substantial additional costs on Chinese electric car manufacturers. However, both the EU and China have motivations to reach a mutually beneficial agreement.
China’s electric vehicle industry seeks lucrative export opportunities to offset declining profits domestically, while German automakers desire access to China’s automotive market and opportunities for electric vehicle collaborations to reduce production costs. With every 10% increase in EU tariffs, Chinese electric vehicle exporters could face an additional $1 billion in costs based on 2023 trade figures.
Past EU investigations into subsidies on Chinese imports have resulted in extra duties ranging from approximately 9 per cent to 26 per cent for compliant companies. Analysts foresee electric vehicle tariffs falling within this range, with duties potentially applied retroactively from early July. China has indicated its readiness to explore alternatives in negotiations, including potential tariff adjustments on automotive imports.
The European Commission’s warning to BYD and Geely for insufficient information provided in response to the subsidy investigation may lead to higher tariffs on these companies, setting a precedent for the broader Chinese automotive industry.
