On 12 February, China’s Ministry of Commerce formally adjusted its position, confirming that Chinese automakers may pursue independent negotiations with the European Union regarding electric vehicle (EV) imports.
The shift follows closely behind the decision granting Volkswagen Anhui a preferential arrangement for the Cupra Tavascan SUV under the EU’s newly introduced individual minimum price framework, which serves as an alternative to standard tariffs.
“It is hoped that more Chinese companies will reach agreements with the European side on price commitments,” said Ministry of Commerce Spokesperson He Yadong at one of the ministry’s regularly scheduled press briefings.
Previously, Beijing had cautioned Brussels against conducting bilateral discussions with individual Chinese manufacturers, even though the EU had provided a procedural mechanism allowing automakers to apply for tariff exemptions on specific China-produced EV models.
He further stated that China remains open to continued dialogue with the EU, adding that “both sides support Chinese EV makers to make good use of price undertakings”.
On 10 February, the European Commission approved Volkswagen Anhui’s application to exempt the Cupra Tavascan from a 20.7% countervailing duty. However, the standard 10% base import tariff remains in effect.
The agreement is contingent upon adherence to a predetermined minimum price and specified sales quotas, making it the first exemption granted since the EU imposed its tariff regime in 2024.
As part of the arrangement, Volkswagen also pledged defined import volumes and committed to EV battery-related investments within the EU.
The China Chamber of Commerce to the EU indicated that several Chinese EV manufacturers are now evaluating the possibility of submitting their own price undertaking proposals.
The chamber emphasized the importance of equitable treatment relative to European competitors and advised maintaining close coordination with companies to ensure that any arrangements remain workable and predictable.
It also noted the structural complexity faced by Chinese exporters, many of whom manage multiple models and layered corporate entities.
From Beijing’s perspective, the price undertaking mechanism represents a more flexible alternative to the tiered tariff system introduced in 2024.
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That framework established varying duty levels by automaker and locked them in for a five-year period.
Tesla, Inc. secured the lowest rate at 7.8%, reflecting extensive cooperation with EU investigators and findings that it benefited from comparatively lower state subsidies than domestic Chinese competitors.
By comparison, BYD faces a 17% rate, Geely is subject to 18.8%, and SAIC Motor was assigned a maximum 35.3% penalty after declining to cooperate fully with EU authorities.
The revised framework effectively leaves automakers with three strategic options: absorb the tariff, negotiate a minimum price agreement, or establish production facilities within Europe to circumvent the duties entirely.
Tesla has not publicly indicated any intention to pursue price undertakings, likely because its sub-10% tariff reduces the economic incentive to accept binding minimum pricing.
In some cases, simply paying the existing duty may prove more financially rational than entering into restrictive price floor arrangements.
Chinese manufacturers accounted for more than 10% of Europe’s EV market share in 2025.
Notably, many Chinese brands have positioned their vehicles at or marginally below comparable European offerings rather than aggressively undercutting on price, choosing instead to absorb tariff costs to protect profit margins and sustain market positioning.
