Brussels rejects China’s EV pricing proposal, sparking trade tensions
Brussels has rejected a Chinese proposal to set a minimum sales price of €30,000 for imported Chinese-made electric vehicles (EVs), three sources with knowledge told Reuters on Tuesday. This move China hope would avert potential EU tariffs that were set to be imposed next month.
The European Commission had previously dismissed similar minimum price offers from Chinese EV makers as part of an anti-subsidy investigation. While specific details of the negotiations have remained confidential, sources familiar with the matter revealed that Brussels rejected the latest Chinese proposal.
China’s Commerce Ministry and the European Commission did not immediately respond to requests for comment.
Brussels argued that the pricing issue was not solely about the prices charged by Chinese EV makers but also the substantial subsidies they receive for production. The Commission had previously declined to provide details of the offers made by Chinese EV manufacturers.
Currently, Chinese carmakers like SAIC and BYD are pricing their EV models just above €30,000 in Europe, despite selling them at significantly lower prices in their domestic market. This highlights their pricing flexibility and the appeal of the European market.
With the deadline for a negotiated deal approaching, the European Commission has indicated that tariffs of up to 45 per cent on Chinese-built EVs will be imposed from October 31 unless a solution is found.
In response to the EU’s decision, China has imposed temporary anti-dumping measures on imports of brandy from the EU, targeting French brands like Hennessy and Remy Martin.
China has previously expressed its desire to negotiate an alternative to tariffs, proposing a “flexible pricing commitment.” However, the European Commission has stated its openness to re-consider other pricing undertakings, including minimum prices and import quotas.
A potential solution could involve individually calculated minimum prices for each carmaker or even per model type, taking into account factors like car size and range. Sources suggest that minimum price levels between €35,000 and €40,000 might be more suitable for negotiations.
Attribution: Reuters
