EU, China in talks to set minimum prices for electric vehicles: Report

Chinese EV giant BYD

The European Union and China have agreed to explore the possibility of establishing minimum prices for Chinese-made electric vehicles, rather than relying on the tariffs that the EU imposed last year, according to a report from Reuters on Thursday.

The report citing German newspaper Handelsblatt said that the negotiations had begun.

The EU's trade commissioner, Maros Sefcovic, recently spoke with Chinese Commerce Minister Wang Wentao in the last 24 hours, and both parties agreed to consider setting minimum prices for these vehicles, as per the Reuters report.

China's Commerce Ministry announced that negotiations would commence immediately.

Sefcovic has emphasized that any proposed minimum prices must be as effective and enforceable as the existing EU tariffs. Previous agreements on minimum prices by the EU have typically involved homogeneous commodities, not complex products like cars.

The European Commission believes that a single minimum price may not sufficiently address the damage caused by subsidies.

In October, the EU raised tariffs on Chinese-built electric vehicles to as high as 45.3%. However, both Brussels and Beijing are now discussing the possibility of lifting these tariffs in exchange for commitments to minimum prices, known as price undertakings, for imported cars.

The report further said that the European Commission is willing to continue negotiating an alternative to tariffs with China, which included tariffs of 17.0% for vehicles made by BYD (002594.SZ), opens new tab, 18.8% for Geely (GEELY.UL) and 35.3% for SAIC (600104.SS), opens new tab, on top of the EU's standard car import duty of 10%.