German carmakers warned on Saturday that consumers could face higher prices after the European Union cleared the way for punitive tariffs on Chinese electric vehicles.
Friday’s decision could cause significant damage to the German car industry, said Thomas Peckruhn of the German Motor Vehicle Trade Association (ZdK).
EU tariffs of up to 35.3% on battery-powered electric vehicles from China could now come into effect in early November, although they could still be rejected if Brussels reaches a solution with Beijing at the negotiating table.
Germany voted against the measure, which Peckruhn said could further undermine 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 German-based manufacturers and suppliers.
“Punitive tariffs are not a solution for fair global trade,” he argued.
German carmakers, including brands such as Volkswagen, BMW and Mercedes, generally opposed the tariffs because they have invested in the Chinese market and rely heavily on sales there.
The EU decision came after the German Automotive Industry Association (VDA) warned that sales of electric vehicles in Germany are expected to fall by 29% by 2024.
According to the VDA, the main reason for the decline was the discontinuation of government subsidies for electric cars last year.
Winfried Hermann, the transport minister in the southwestern German state of Baden-Württemberg – home to companies such as Mercedes-Benz, Porsche, Bosch and Audi – called the measure “damaging for the climate and economically fatal” because it would raise the prices of electric cars further increase.
