Drop high tariffs on China Electric Vehicles (EVs), welcome Chinese car factories in Europe, Mercedes Chief, Ola Källenius.

Ola Kallenius urges Brussels to drop protectionist approach in form of punitive tariffs on China’s Electric Vehicles (EVs).

Says German carmakers have been the most vocal opponents of protectionist measures as they fear retaliatory moves from Beijing.

Mercedes-Benz CEO, Ola Kallenius, has urge European Union (EU) to encourage Chinese carmakers to open more plants in the bloc as part of a deal to drop punitive tariffs on imported Chinese electric vehicles.

In an interview with Financial Times, Ola Kallenius, who is also president of EU car industry body Acea, said German carmakers have been the most vocal opponents of protectionist measures as they fear retaliatory moves from Beijing.

“Nobody disagrees about the fact that the level playing field is a legitimate discussion. The question is, what tool do you use?” “Don’t accelerate protectionism because… we have much to lose.”

In October, Brussels imposed tariffs of up to 45 per cent on Chinese EV imports after a big surge in sales, alleging they received unfair subsidies, and opened several anti-dumping and anti-subsidy investigations.

As expected, China, the world’s largest car market, responded with anti-dumping tariffs on brandy and investigations into pork and dairy products.

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Ola Källenius notes that German carmakers agreed to form joint ventures with Chinese partners when they sought to establish themselves in the emerging Asian economy in the 1980s.

“When we came to China …. there was a call upon us by the policymakers : industrialise here if you want to capture the market. From my understanding, European policymakers have said the same, vis-à-vis the Chinese,” he said.

“I think those are legitimate conversations, but that means that you would actually open up markets and create as much as possible a level playing field and then let the best market actor win.”

Per Financial Times, Brussels is also planning to impose criteria requiring Chinese businesses to have factories in Europe and share technological knowhow.

Chinese EV giant BYD plans to build vehicles in Hungary, while Chinese battery manufacturer, CATL, recently agreed to build a €4.1bn lithium battery factory in Spain with Stellantis.

Kallenius said tariffs would hurt the industry and Brussels should compromise with Beijing on a deal to remove them, adding that China had become an integral part of the global automotive supply chain, including raw materials, advanced chips and components.

Source : Financial Times

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