- Chinese Cupra Tavascan could dodge tariffs under EU price deal.
- Lawmakers expected to approve the pricing-based tariff path.
- China supports the move but pushed for broader concessions.
The Volkswagen Group has been doing some careful footwork lately, trying to stay ahead as Europe tightens the rules on electric cars coming in from China. Cupra boss Wayne Griffiths warned just over a year ago that the brand could be “wiped out” by new European Union tariffs on electric vehicles imported from China.
But now, the VW Group might get a special lane through Europe’s new tariffs on Chinese-built EVs, and that possibility isn’t going unnoticed in Beijing.
More: Ford May Fill Its Factory With Chinese EVs So They Can Dodge Tariffs
Here’s the deal in simple terms. The EU slapped tariffs on electric cars made in China, arguing they benefit from heavy state support. But there is a loophole. Instead of paying those extra duties, a carmaker can agree to sell a model at a minimum price.
Volkswagen looks set to use that option for the Cupra Tavascan, which is built in China, Germany’s Handelsblatt reports. If Brussels signs off, VW can ship it into Europe without being stung by punitive 20.7 percent tariffs, as long as it sticks to the agreed pricing rules. Officially, this is all perfectly above board and part of existing procedures.
Not A U-Turn
The European Commission’s diplomats in Beijing say these kinds of allowances do not constitute a U-turn on its Chinese vehicle policy, a complaint leveled by some critics. Beijing, meanwhile, is being outwardly positive about the rumored EU concessions.
But behind closed doors, the Chinese worry that Volkswagen might be getting friendlier treatment than other manufacturers because it’s a European brand. China had pushed for an industry-wide solution, but now seems to be accepting smaller, case-by-case deals, realizing that letting individual brands cut their own deals may be better than endless stalemate.
Long Process
Each application for a minimum pricing deal can take well over a year and must be reportedly handled on a car-by-car basis, the report says. Industry watchers doubt every Chinese brand will rush in, especially those already making healthy margins even with tariffs in place, but VW evidently believes it’s worth the admin in the Tavascan’s case.
The Tavascan is Cupra’s sportier take on the VW ID.5, a 182.8-inch (4,644 mm) electric crossover built around the MEB platform and offering a mix of single and dual-motor powertrains with up to 353 miles (568 km) of electric range.
