German carmakers on Saturday warned that consumers could face higher prices after the European Union paved the way for punitive tariffs on Chinese electric vehicles.
Friday’s decision could significantly damage Germany’s automotive industry, said Thomas Peckruhn from the German Association of Motor Vehicle Trades (ZdK).
The EU tariffs of up to 35.3% on battery-powered electric vehicles from China could now potentially come into force in early November, although they could still be dismissed if Brussels reaches a solution with Beijing at the negotiating table.
Germany voted against the measure, which Peckruhn said could further hit business confidence. For car dealers who have invested in Chinese brands, the tariffs would distort competition, he suggested.
Peckruhn also highlighted the high likelihood of a Chinese counter-reaction, which could affect all exports of vehicles not produced in China and weaken manufacturers and suppliers based in Germany.
“Punitive tariffs are not a solution for fair, global trade,” he argued.
German carmakers, which include brands like Volkswagen, BMW and Mercedes, generally opposed the tariffs as they have invested in the Chinese market and have relied heavily on sales there.
The EU decision came as the German Association of the Automotive Industry (VDA) warned that sales of electric vehicles in Germany are expected to plunge 29% in 2024.
According to the VDA, the main reason for the decline was the discontinuation of the government’s electric car subsidy last year.
Winfried Hermann, the transport minister in the south-western German state of Baden-Württemberg – which is is home to companies such as Mercedes-Benz, Porsche, Bosch, and Audi – called the measure “harmful to the climate and economically fatal” as it would further raise prices of electric cars.
