EU Tariff Probe Impact on BMW-Great Wall Electric Vehicle Production

Mass production of the roughly 35,000-euro ($37,345) vehicle, produced by a BMW and China’s Great Wall Motor Co Ltd joint venture, began late last year – shortly after the EU launched its probe.

With production still, in the early days, the JV was unable to fulfill the European Commission’s survey to the level of detail required to be classed as a company cooperating with the investigation, the source said, declining to be named because discussions are private.

Companies seen as cooperating with the EU were subject to lower tariffs of 17.4%-21%, according to a European Commission document seen by Reuters. That includes BMW Brilliance Automotive, another BMW joint venture that has produced the electric iX3 for export to Europe from China since 2021.

BMW declined to comment. BMW CEO Oliver Zipse said earlier this week the tariffs were the “wrong way to go”, echoing concerns from other German carmakers fearful of a trade war that could end in counter-tariffs on cars exported from Germany to China.

The European Commission said that joint ventures producing cars in China would be subject to duties, without specifying whether more recently formed ventures might benefit from the lower 21% rate for companies that cooperated with the investigation.

A 38.1% price hike on the Mini, which was to be exported from China to Europe, could dent sales at a time when the carmaker is counting on every projected all-electric sale to help meet tightening carbon emissions targets.

The deadline for imposing provisional measures is July 4, after which the investigation will continue until late October. That leaves time for Beijing and Brussels to make a deal to soften the blow. Companies can also submit comments and request hearings after the provisional duties are applied.