EU deal with China on EV prices unlikely this month, says official

A European Union (EU) official has said that it’s unlikely that talks with the Chinese government on imposing minimum sales price stipulations in place of tariffs will come to fruition this month, following recently passed tariffs on electric vehicle (EV) imports from the country.

Earlier this month, the European Commission passed a proposal to impose an additional 35.3 percent tariff on some EVs made in China, along with the 10-percent import tariff that’s currently in place. Prior to the proposal’s passing, EU officials shared concerns that negotiations may continue even after the tariffs passed, especially as officials in Beijing push for a minimum import price that would avert some of the extra tariffs.

On Monday, a senior EU official told Reuters that it would be “very difficult to reach an agreement” this month, due to the extreme complexity of price minimum stipulations in the negotiations.

“I won’t exclude it, but it seems very, very difficult to reach an agreement by the end of October, because (of)… the very complex, difficult issues to solve,” said the official, who remained anonymous in the report.

Tesla is receiving additional import tariffs as low as 7.8 percent under the newly passed proposal, while SAIC and others are receiving the maximum 35.3 percent tariff.

Issues with the variety of different vehicles suggest that one particular minimum price point wouldn’t work as intended, according to the official. If passed, it would need to be determined separately for different companies, based on how valuable their sales were and how many subsidies they receive.

The official also went on to say that reaching such an agreement would be challenging, given that price undertakings with a minimum price stipulation had been particularly bad for homogenous commodities, compared to those with many different sales channels. He also says that the Commission has been offered several minimum price proposals from the Chinese Chamber of Commerce, requesting that a number of EV makers be covered.

However, the EU official maintained that past minimum price efforts waged by China were not positive. For example, the official notes that the Commission passed a minimum price stipulation to replace tariffs on Chinese solar panels ten years ago, though China now has a 90-percent share of the bloc’s PV market.

“It needs to be fully enforceable, and it needs to be monitored very, very closely, and the risk of circumventing undertakings need to be reduced significantly,” the official added.

The Commission reportedly rejected a minimum price stipulation of 30,000 euros ($32,946) earlier this month, according to another report from Reuters that cited three sources familiar with the matter.

The EU is the latest to enact increased tariffs on Chinese EVs and components related to their production. Earlier this year, the U.S. passed a 100-percent tariff on Chinese EV imports, along with a 25-percent tariff on EV battery materials. Canada also launched similar tariffs on Chinese EV imports earlier this month, set to take effect next week.

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Source: https://www.teslarati.com/eu-deal-china-ev-prices-unlikely/