Exclusive VW seat owner warns that there is risk if the tariffs on Chinese-made EVs are not lowered
By Victoria Waldersee
BERLIN (Reuters) – Volkswagen seats, the Spanish subsidiary of Europe's largest automaker, will be forced to cut output, and will reduce 1,500 workers if the EU does not lower tariffs on the brand's Chinese electric vehicles by the end of March. Its CEO told Reuters.
Since October, when the EU imposed tariffs on all Chinese electric vehicles sold in Europe, SEAT SA (making cars under seats and Cupra brand) paid an additional 20.7% on its Cupra’s existing 10% tariff Tavascan is manufactured at most of the VW Group's factories in Anhui, China.
Several executives from European automakers said that, contrary to the intention of protecting them, additional tariffs on their Chinese vehicles are causing collateral damage to domestic companies and jobs.
Seat CEO Wayne Griffiths said the fee levied cars for about €50,000-60,000, causing the subsidiary to miss its financial target last year and will lose in 2025 Hundreds of millions of euros.
“We don't have much time. We need to solve the solution in the first quarter,” Griffith said in an interview with Reuters.
The European Commission declined to comment.
Reduce output and start laying off employees
Seats and Volkswagen Group executives have regularly held Tavascan’s fate with EU officials, the latest, and Spanish Prime Minister Pedro Sanchez also called for a resolution to the committee chairman Ursula von der Leyen A problem and avoided significant work losses, a seat spokesperson said.
Griffiths declined to disclose the levels of tariffs that automakers can afford, but said it must be “as close as close as possible” to the initial 10%.
If additional tariffs are not reduced or removed in the first quarter, seats will be forced to cut losses from their lineup.
This would raise another question to the subsidiary: how to reduce average fleet emissions to achieve EU goals without Tavaska.
Automakers can buy carbon credits from electric car manufacturers (called “mergers”) or cut production of combustion engine cars to reduce average emissions.
So far, Volkswagen Group has avoided joining the pool and said in December that it hopes to close its emissions gap with electric vehicle sales.
“We can't solve this problem overnight,” Griffith said. “Then what do you do? Reduce the output of the combustion engine and start firing people. If we can't fix it, what will happen.”
Tesla, BMW, Mercedes-Benz and many Chinese electric car manufacturers have challenged the European Court of Justice's new tariffs. However, these cases take an average of 18 months and can be appealed.