EU officials at Brussels has nixed the latest proposal from the Chinese government for imported electric vehicles made in China to be sold at a minimum price of 30,000 euros (US$ 32,946). Sources close to the negotiation said that the move was supposed to help avert EU tariffs being imposed next month.
The European Commission said it had dismissed minimum price offers from EV makers in China a month ago as a resultof an anti-subsidy investigation that revealed uneven trade practices that has thrown both parties into their biggest trade dispute in a decade.
Specific details of the compromises being offered in negotiations between the two have not previously been reported and the sources of the info refused to be named for security reasons.
Electric cars cost on average less than half as much in China as they do in Europe and the United States, according to 2023 figures from data firm JATO Dynamics. The reason for this is that the Chinese carmakers benefit from a range of cost advantages - from local access to raw materials and batteries, to heavy subsidies from Beijing.
The average retail price of a battery-electric car in China was around 32,000 euros (US$ 35,126.40) in the first half of 2023, including models such as BYD's Seagull that sell for under 10,000 euros.
By contrast, the average retail price of a battery electric car in Europe was 66,000 euros, according to JATO's data. Most cheaper models under development - at around 20,000 euros - are not due to hit the market until 2025 at the earliest, with Volkswagen targeting a 20,000 euro vehicle in 2027.
The time to fend off tariffs through a negotiated deal is limited, with the Commission last week saying that tariffs of up to 45 percent on EVs built in China would be imposed from 31 October for five years unless both sides agree on a Plan B.
Recently, China launched a counter trade attack by imposing temporary anti-dumping measures on imports of brandy from the EU, hitting French brands including Hennessy and Remy Martin, days after the 27-state bloc voted for the EV tariffs.
China’s Commerce Ministry has previously said it was looking to negotiate an alternative to tariffs that would involve some form of “flexible pricing commitment”. It did not provide details.
A solution could be an individually calculated minimum price for each carmaker and possibly per model type, depending on size of car and its range, the sources said. It was surmised that the minimum price levels of 35,000 to 40,000 euros would serve as a better yardstick for talks.
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