The European Union (EU) and China are exploring a new agreement to set a minimum price for Chinese-made electric vehicles (EVs) instead of imposing high tariffs. This move could reshape the competitive landscape between Chinese and European automotive industries. The EU had previously planned to levy tariffs as high as 45.3% on Chinese EVs, impacting brands like Tesla, BYD, and Geely. However, discussions are now underway to create a more favorable business environment and address market access issues.
China, the world's largest EV market, holds a competitive edge with 11 of the top 20 global EV manufacturers. European automakers face increasing competition as they transition to electric mobility, with China already surpassing Japan as the leading car exporter. Setting a minimum price could mitigate the impact on Chinese EV exports to Europe, facilitating market participation and promoting the EU's electric transition.
Collaborations between European and Chinese automakers, such as Volkswagen with XPeng and Leapmotor with Stellantis, highlight the growing interdependence. These partnerships aim to overcome trade barriers and leverage China's cost-effective production capabilities.
