BMW, Mercedes Against EU Tariffs On Chinese EVs, Say It Could Backfire

As the European Union investigates whether it should introduce import tariffs against Chinese EVs to protect its local manufacturers, Germany’s BMW and Mercedes say they are against the move, arguing that it could backfire.

In order to promote the growth of its domestic automotive manufacturing industry, China has offered generous subsidies to domestic companies making EVs and their batteries. Although the move has been successful, the nation’s automakers are now building more vehicles than they can sell domestically, leading to fears that they will undercut European automakers and sell vehicles at an unmatchable price.

Read: Mercedes Boss Pleads With EU To Reduce, Not Increase, Tariffs On Chinese EVs

However, BMW and Mercedes both operate manufacturing plants in China, and they argue that introducing import tariffs on Chinese-made cars and components could slow Europe’s transition to electric vehicles.

“We don’t think that our industry needs protection,” BMW CEO Oliver Zipse said this week, per Reuters. “There is no Green Deal in Europe without resources from China.”

Mercedes CEO Ola Kaellenius agreed with Zipse, reiterating his opposition to restrictions on trade with China this week, Reuters reports. In fact, in the past, he has argued that the EU should reduce tariffs against the Asian country, not increase them.

Not every European automaker agrees, however. In a recent letter to European voters, Renault CEO Luca de Meo wrote that the continent should support its automotive sector and proposed that automakers pool their resources and work together to take on China’s auto industry.

The European Union’s probe is set to conclude in November, but it may decide to impose provisional duties as soon as July. Despite the opposition from Germany, the bloc’s leaders seem to be in support of taking steps to protect Europe’s manufacturing sector from outside threat.