AutoBeta(AutoBeta.net)07/17 Report--

The European Commission has signalled to Volkswagen and BMW that it may consider lowering import tariffs on electric vehicles made in China by the two carmakers, according to two people familiar with the matter. The European Commission is willing to classify Volkswagen and BMW as companies that cooperate with sample surveys, reducing tariffs on Chinese-made models of the two companies to 20.8 per cent, compared with 37.6 per cent under the current plan, according to people familiar with the matter.

The European Commission has not yet finally decided whether to lower import tariffs on Chinese-made electric cars made by Volkswagen and BMW, two people familiar with the matter said. If the European Commission reaches an agreement with Volkswagen and BMW, it will be the first preliminary compromise on tariffs by the European Commission. In addition to Volkswagen and BMW, Tesla, the US carmaker that makes electric cars in China, is also likely to receive a separate tax rate in the final stage.

Volkswagen declined to comment on the report, while BMW did not comment.

On July 4, local time, the European Commission announced that it would impose a temporary countervailing duty on electric vehicles imported from China from July 5 for a maximum period of four months. In the meantime, EU member states will vote on the final countervailing measures, and if passed, the EU will formally impose a five-year countervailing duty on Chinese electric vehicles. However, the European Commission said in its announcement that it would continue to consult with the Chinese side with a view to reaching a solution in line with WTO rules.

A spokesman for the European Commission said that some companies that had not produced pure electric vehicles in China during the investigation were analyzing their requests and would conduct a final evaluation in the follow-up process. At the same time, he added: "all parties concerned will be notified before the European Commission announces any final measures and will have the opportunity to comment."

According to the announcement, three Chinese car companies sampled by BYD, Geely Automobile and SAIC will be levied temporary countervailing duties of 17.4%, 19.9% and 37.6% respectively, with SAIC lower than the tax rate disclosed on June 12. BYD and Geely remain unchanged. In response, the European Commission explained that the change was based on comments submitted by interested parties on the accuracy of the calculation. According to the EU announcement, other Chinese car companies that cooperate but are not sampled will be subject to a weighted average tariff of 20.8 per cent, while those without cooperation will have a tax rate of 37.6 per cent.

At present, the EU imposes a 10% tariff on all imported cars, which means that the tariff on the export of BYD electric vehicles to Europe will reach 27.4%, Geely 29.9% and SAIC as high as 47.6%.

On July 17, the European Union held an "advisory vote" on imposing tariffs on Chinese-made electric vehicles. Twelve EU member states, including France, Italy and Spain, supported it, four opposed it, and 11 member states, including Germany, Finland and Sweden, abstained. According to the report, the vote is confidential in writing and is not binding. According to the report, a number of member states abstained from voting, indicating that they are "aware of the risk of a trade war with China." Reported that the vote is not binding, after which a final vote will be held to decide whether to adopt the tariff proposal of the European Commission.

Industry insiders said that the European Commission's move reflects the huge internal differences over the imposition of countervailing duties, which makes it difficult to reach a consensus, but there is no small challenge to prevent the EU from formally imposing tariffs in four months' time. On the one hand, there is a need for continued dialogue between China and the EU; on the other hand, Chinese electric car companies should also be prepared to step up lobbying efforts while looking for other potential markets.

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