EU sets tough conditions to solve China EVs dispute

The European Commission set out the conditions on Monday under which China-based electric vehicle makers can replace EU tariffs with commitments to sell at minimum prices and said it would take into account Chinese EV investments in the bloc.

For Beijing, the tariffs of up to 35.3% on EVs are the biggest source of trade tensions with the European Union. Brussels, meanwhile, is seeking to protect Europe’s auto industry from an influx of cheaper imports produced by the likes of BYD, SAIC and Geely.

The two sides have held a series of discussion to seek an alternative to the levies.

China favours minimum price commitments from producers, and the Commission said that, following talks with the Chinese commerce ministry, it had issued written guidance on how minimum price offers could replace tariffs.

The EU executive is still requiring that any offered prices eliminate the harmful effects of subsidies, have an effect equivalent to duties, be practicable and minimise cross-compensation.