German automakers warned Saturday that consumers could face higher prices after the European Union paved the way for punitive tariffs on Chinese electric cars.
The head of the German Automotive Industry Association, Thomas Pekrun, said that Friday’s decision could cause great harm to the German auto industry.
On Friday, European Union member states agreed to impose fees of up to 35% starting next November, in addition to the current fees of 10%. However, the European Commission said in a statement that negotiations will continue with China.
Germany opposed the measure, with Pekrun noting that it could negatively impact business confidence, and noting that for car dealers who have invested in Chinese brands, the tariffs would distort competition.
Pekron: Punitive tariffs are not a solution to fair global trade
Pekrun also explained the high probability of a Chinese counter-reaction, which could affect all exports of cars not produced in China and weaken automakers and suppliers in Germany.
“Punitive tariffs are not a solution to fair global trade,” he said.
German automakers – which include brands such as Volkswagen, BMW and Mercedes – have generally opposed the duties, as they have invested in the Chinese market and rely heavily on sales there.
Last April, Volkswagen announced an investment of 2.5 billion euros (about 2.79 billion dollars) in expanding the production and innovation center in the city of Hefei in eastern China to increase the pace of innovation in the country, according to what was reported by the Chinese Xinhua Agency.
Expectations of a decline in electric car production
Meanwhile, German auto industry experts on Friday significantly reduced their expectations for the production of electric cars in Germany this year in light of the current weak demand.
They pointed out that annual sales are expected to reach 372,000 battery-powered cars only this year, i.e. 29% less than the previous year.
They explained that the main reason for this decline was the cessation of support for electric cars last year, which means that electric cars constituted 13% of all new car registrations.
