The European Union (EU) announced on April 10 that it had agreed with China to begin negotiations on introducing a minimum price instead of a tax for Chinese electric vehicles (EVs). The agreement marks the beginning of negotiations between the EU and China and was reached through a meeting between EU Commissioner Maroš Šefčovi and Chinese Minister of Commerce Wang Wentao.
The EU has never introduced a minimum price for complex products such as automobiles, but the negotiations will discuss how to set the price of Chinese EVs as a minimum price. Šefčovič stated that the minimum price should have the same effectiveness and enforcement as a tax.
The EU raised taxes on Chinese EVs by up to 45.3% in October last year, but the two sides proposed a plan to remove the tax by introducing a minimum price. The German Automobile Industry Association (VDA) welcomed the start of the negotiations, pointing out that the tax was a wrong policy and urging a negotiated solution.
Chinese vehicles account for a large portion of the German automobile industry, accounting for one-third of sales last year, and the German automobile industry has been opposing EU taxes.
