Volkswagen AG’s Chief Executive Officer Oliver Blume has expressed concerns about potential retaliatory tariffs from China in response to the European Union’s recent tariff measures on Chinese electric vehicles (EVs), Blooomberg reports.
According to a report by Bild am Sonntag, Blume is advocating for alternative solutions to these tariffs, which he believes could pose significant risks to the German automotive industry.
Blume stated that punitive tariffs could create considerable disadvantages for German manufacturers in the Chinese market, urging that the industry should oppose any new tariff regulations. He suggested that companies investing and generating jobs in Europe should be eligible for exemptions from the steep tariffs, which could reach as high as 45% on Chinese EVs following the EU’s vote last Friday.
The proposed tariffs, aimed at addressing claims of unfair subsidies received by Chinese EV manufacturers, could also lead to retaliatory measures from China targeting German automobiles. This could impact Volkswagen’s vehicles produced in China and affect exports of other German brands such as Audi, Porsche, and Lamborghini.
This situation presents additional challenges for the German automotive sector, which is already facing profit warnings and heightened competition, contributing to concerns about its financial stability. Volkswagen recently revised its earnings guidance downward for the second time this year and is contemplating the possibility of closing factories in Germany to manage costs.
The EU’s decision to implement tariffs follows an investigation that concluded China’s EV industry benefited from unfair subsidies.
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