EU official doubts timely agreement with China on EV import prices

Negotiations between the European Union (EU) and China regarding minimum import prices for electric vehicles (EVs) are facing significant challenges, with an EU official indicating that reaching an agreement by the end of October is unlikely. The discussions aim to prevent the imposition of tariffs on Chinese-built EVs following the conclusion of the EU’s anti-subsidy investigation, which is set to wrap up this month.

The official described the negotiations as a “formidable challenge,” citing the complexity of automotive products and the need for any price agreements to be both adequate and enforceable. “I won’t exclude it, but it seems very, very difficult to reach an agreement by the end of October,” the official stated, underscoring the intricate issues involved.

While there have been price proposals from the Chinese Chamber of Commerce covering several EV producers, the official noted that previous minimum price agreements have typically pertained to homogeneous commodities, not the diverse range of vehicles on the market. The complexity of car sales channels further complicates the situation.

China, in a recent statement, urged the EU not to engage in separate price negotiations for Chinese-made EVs, warning that doing so could destabilise broader tariff discussions. The EU official remarked that it would be “highly unusual” to focus solely on one price undertaking, as the Commission is required to evaluate all proposals comprehensively.

The EU maintains that the responsibility for finding a solution lies primarily with China. Any agreement on minimum import prices must adhere to World Trade Organisation (WTO) rules, adequately address the impact of subsidies, and be enforceable and monitorable.

The EU has indicated that different minimum prices may be necessary for various producers, depending on their sales values and subsidy receipts. Proposed tariffs could range from 7.8% for companies like Tesla to 35.3% for SAIC, reflecting the perceived level of subsidies received by each manufacturer.

The official expressed concerns over the need for any agreement to be carefully designed to avoid past issues of circumvention, emphasising the importance of enforcement and monitoring in any future agreements.