The EU is considering imposing a price floor on Chinese electric vehicles to replace additional tariffs, ensuring fair competition and limiting the impact on European businesses.

The European Commission (EC) announced on December 22nd that it is considering the possibility of applying minimum prices to electric vehicles imported from China as an alternative to continuing to impose additional tariffs, amid the ripple effect of current trade protection measures on European manufacturers.

According to an EC spokesperson, in recent weeks there have been initial positive signs regarding price commitments for imported battery-electric vehicles. The option of applying a price floor is considered "a viable solution" to ensure fair competition in the European Union (EU) market without necessarily escalating trade tensions.

Currently, the EU is applying countervailing duties of up to 35% on electric vehicles manufactured in China, in addition to the general import duty of 10%. These measures were implemented after the EU concluded that Chinese electric vehicles benefited from unfair forms of subsidies, putting significant pressure on manufacturers within the bloc.

Not only are Chinese companies like BYD and SAIC affected by the tariffs, but European automakers, including major German corporations like Volkswagen and BMW, which manufacture and export electric vehicles from China to the EU, are also significantly impacted.

If approved, the shift to a price floor is expected to stabilize the European electric vehicle market, curb excessively low price competition, and create room for negotiations with China to find a long-term solution to trade disputes in the electric vehicle industry.

Source: VTV