Mercedes boss: “Europe must make things easier for Chinese brands”

Europe wants to introduce additional import duties on electric vehicles from China, as they are being heavily promoted by the Chinese government. Mercedes has now said that Brussels should not want that.

Mercedes boss Ola Källenius has called on the European Union to reduce import tariffs. He believes strong competition from China will help European brands.

Mercedes calls competition good

Protectionism is not the right way to counteract this, says Källenius. “I am an opponent because in my opinion the existing tariffs should be maintained [voor Chinese auto’s – red.] only below.”

According to Källenius, the competition from China is actually good because it forces European brands to develop better products and techniques much faster. “These are market forces. Let competition arise.”

Is Källenius completely honest?

Now the question arises as to whether Källenius is completely honest. Mercedes is partly owned by BYD and the brand is also largely dependent on the Chinese market. Every third Mercedes is sold in China.

“We did not ask for an investigation by the European Union,” Källenius said. “We don’t need protection and neither do Chinese companies. They’re just doing their best to compete on the world stage, just like us.”

Import tax on electric cars

Chinese brands currently pay a 10 percent surcharge on all electric cars they import into the EU. European manufacturers have to pay 15 percent when importing their models to China.

Evidence of Chinese state aid

The European Union has found evidence that Chinese brands are receiving massive state aid, allowing them to offer their electric cars at (too) low prices.

According to an investigative committee, there is unfair competition because Chinese brands can offer their electric vehicles cheaper than Western companies.

They receive government support, among other things, in the form of “direct transfers”, as described in the European report. Brussels says it has sufficient evidence of this.

Preparing for import duties

The EU has ordered that electric cars from China must now receive special approval. This measure allows any import tax to be introduced quickly.

China reacted predictably and criticized the European investigation. It is a case of “protectionism that will seriously damage trade relations between China and the EU”.

French brands welcome research

BMW, Volkswagen and therefore Mercedes are also not satisfied with the research. They have major interests in China, have a relatively large and stable share of the car market and therefore have a lot to lose.

The French brands Citroën, Peugeot and Renault support the research. Logical, because they play a marginal role in the Chinese market and will therefore suffer relatively little from reprisals.