China Allows EV Makers to Negotiate Directly With EU
China’s Commerce Ministry signaled a policy shift on Thursday, indicating that Chinese electric vehicle (EV) manufacturers can now negotiate directly with the European Union. The move follows a breakthrough agreement that granted Volkswagen tariff relief for one of its China-produced SUV models.
The European Commission, which manages trade policy for the 27-member bloc, approved a request from Volkswagen’s Cupra brand earlier this week. The approval exempts the China-made Tavascan SUV coupe from additional import tariffs, provided the company agrees to a minimum price commitment and a sales quota. This marks the first exemption since the EU introduced the new duties in 2024.
Beijing Reopens Talks With Brussels
China resumed negotiations with the EU in December, urging Brussels not to conduct separate discussions with individual Chinese manufacturers. However, EU trade rules allow automakers to apply for exemptions on specific electric vehicle models produced in China.
Speaking at a regular press briefing, Commerce Ministry spokesperson He Yadong said Beijing hopes more Chinese companies will reach similar pricing agreements with European authorities.
He added that China remains open to ongoing dialogue with the EU and supports Chinese EV manufacturers in making effective use of price commitments to address tariff concerns.
Analysts See Progress but Expect Gradual Approvals
Market analysts welcomed the Volkswagen agreement as a positive development for EU-China trade relations. However, they cautioned that additional exemptions for other automakers may take time, as approvals appear to be assessed on a case-by-case and model-by-model basis.
Before the exemption, the all-electric Cupra Tavascan faced an extra 20.7% tariff, in addition to the standard 10% import duty.
The latest development signals a more flexible approach from Beijing, potentially easing tensions between China and the European Union over electric vehicle trade.
