After more than a year of negotiations, a major breakthrough has been achieved regarding the EU's anti-subsidy tariffs on Chinese-made electric vehicles—a "price commitment" mechanism will replace high anti-subsidy duties. On January 12, according to an announcement on the Chinese Ministry of Commerce's official website, to implement the consensus reached at the China-EU leaders' meeting and properly resolve the EU's anti-subsidy case on electric vehicles from China, both sides engaged in multiple rounds of consultations based on mutual respect.
Both parties agreed on the necessity to provide general guidance on price commitments to Chinese exporters of battery-electric vehicles to the EU, enabling them to address relevant concerns in a more practical, targeted, and WTO rule-compliant manner.
A reporter learned from relevant departments of the Ministry of Commerce that adopting "price commitment" instead of "tariff imposition" was a joint decision reached through government consultations, fully signaling the positive intent of both China and the EU to manage frictions. The general guidance document represents a consensus built step by step, jointly upholding the rules-based international trade order.
Wei Wenqing, Deputy Secretary-General of the China Association of Automobile Manufacturers, stated that using the "price commitment" method for exporting Chinese pure electric vehicles to the EU is a major positive outcome achieved through several rounds of talks between the two sides. This is the result of mutual efforts and signals both parties' commitment to further strengthening win-win cooperation in the automotive industry.
Cui Dongshu, Secretary-General of the China Passenger Car Association, also noted that the consultation outcome of replacing high tariffs with a "price commitment" is a significant breakthrough reflecting pragmatism and mutual benefit. "This mechanism preserves core market access channels for Chinese electric vehicles in the EU, avoids the impact of high tariffs, stabilizes the market access foundation, and stabilizes industry expectations," Cui told reporters.
Export prices will increase; Expert recommends individual automakers submit quotes In Cui Dongshu's view, the previously proposed high EU anti-subsidy duties, combined with basic tariffs, resulted in a comprehensive tax rate approaching 45%, posing a significant shock to the cost and pricing structure of Chinese EV exports to Europe, with some automakers even facing the risk of exiting the EU market.
In October 2023, the European Commission initiated an anti-subsidy investigation into electric vehicle imports from China. In October 2024, EU member states voted to impose anti-subsidy duties of up to 35.3% on Chinese-made electric vehicles for five years, on top of the existing 10% tariff.
According to previously released information from the European Commission, SAIC, Geely, and BYD faced additional tariff rates of 35.3%, 18.8%, and 17% respectively. Tesla applied for an individual review and received a final additional tariff rate of 7.8%.
In Wei Wenqing's opinion, the EU's imposition of heavier tariffs on Chinese electric vehicles is primarily due to its belief that the previous entry of Chinese EVs impacted the development of the local automotive industry. "After joint discussions between the European Commission and the Chinese government, both sides will adopt a 'price commitment' mechanism to avoid the high additional tariff of up to 35.3%. This aims to mitigate potential impacts on the EU's local automotive market through Chinese automakers proactively increasing the export prices of their vehicles," Wei told reporters.
On the evening of January 12 Beijing time, the "Guidance on Submitting Price Undertaking Applications" published on the European Commission's website clarified that the EU side will follow the basic principles of non-discrimination, objectivity, and fairness, assess "price commitment" applications submitted by Chinese exporting automakers according to uniform standards based on relevant WTO rules; eligible companies will use "price commitments" as a substitute for anti-subsidy duties.
Tu Xinquan, Dean of the WTO Research Institute at the University of International Business and Economics, also pointed out that a "price commitment" is an alternative to being subject to anti-subsidy duties. Exporters negotiate with the European Commission to propose a minimum export price based on the guidance document. "This price will certainly be higher than the original price, aiming to basically offset the so-called impact of subsidies," he said.
A review of the guidance document reveals it outlines two possible approaches for setting the Minimum Import Price (MIP): one based on the exporter's CIF (Cost, Insurance, and Freight) price plus the relevant margin of the anti-subsidy duty; the other setting the MIP based on the sales price of similar non-subsidized pure electric vehicles produced in the EU, including sales, general, administrative expenses, and a reasonable profit margin. "The core requirement of this setting is that the selling price of electric vehicles exported from China to the EU must not be lower than that of locally produced comparable models," Wei Wenqing believes, noting this is also a measure taken by the EU to protect its domestic automotive industry.
Wei Wenqing pointed out that while the document lists two specific methods for calculating the minimum import price, these are not the only options; companies can still use other compliant approaches. "The two methods mentioned in the guidance are commonly used globally, but specifics require automakers to engage in direct negotiations."
The guidance document specifies that automakers can submit "price undertaking" applications individually or jointly as a group. "It is more appropriate for individual automakers to submit quotes," an anonymous automotive industry expert suggested, noting that joint submissions by multiple companies would increase complexity due to different models and configuration options, and "the simpler, the easier the assessment."
Impact of "Price Commitment" Far Less Than Tariff Hikes; Corporate Profit Margins Expand "Compared to the previous simple tariff imposition, this is certainly progress and more welcomed by companies," Tu Xinquan stated. The "price commitment" might lead to higher vehicle prices, which could somewhat affect sales volume, but it ultimately leaves the profit with the companies, whereas the revenue from anti-subsidy duties goes to the EU government.
Wei Wenqing also believes this move generally benefits Chinese automakers' entry into the EU, with the most direct advantage being that exporting companies do not have to pay the tax, keeping the profit within the automakers. He noted that if an automaker's "price commitment" proposal is approved, that company is exempt from paying the anti-subsidy duty to the destination country.
Shi Xiaoli, Director and Professor of the China University of Political Science and Law's WTO Law Research Center, explained that many of the detailed items in the guidance document are "technical arrangements"—for instance, to avoid uncertainties for local authorities in calculating non-subsidized prices if exporters establish sales companies within Europe.
"We should recognize that after over a year of negotiations between the Chinese and EU governments, finally replacing anti-subsidy duties with a 'price commitment' is a very significant achievement. The EU side was previously unreceptive to the price commitment proposal, so this represents substantial progress," Cui Dongshu emphasized. He noted that while the "price commitment" method imposes some constraints on selling prices, automakers can maintain reasonable profits through cost optimization and product mix adjustments, making the overall impact far less severe than tariff hikes. This is a key outcome of pragmatic balancing by both sides and demonstrates the value of resolving differences through dialogue.
From the perspective of Chinese automakers, the "price commitment" is undoubtedly more favorable than imposing anti-subsidy duties. Previously, the EU's imposition of anti-subsidy duties made EU importers reluctant to purchase Chinese products because the importers bear the cost of the anti-subsidy tax. "If they don't purchase Chinese electric vehicles, importers avoid 'carrying the tax burden.' This arrangement significantly reduced importers' enthusiasm, consequently creating obstacles for the sales of Chinese electric vehicles in the European market," Shi Xiaoli stated.
Chinese Electric Vehicles Expected to Achieve ~20% Annual Growth in EU Market Europe is one of the world's largest markets for premium cars, with high consumer acceptance of electrification and intelligence, which aligns well with the new energy and smart connectivity technologies that Chinese automakers have focused on developing in recent years, giving it significant strategic importance.
In fact, during the consultation period, several Chinese EV companies like BYD and Nio continued their European expansion. According to data released by Germany's Federal Motor Transport Authority on January 6, in December 2025, BYD's new car registrations in Germany were more than double those of Tesla. For the full year, BYD's sales in Germany, Europe's largest EV market, grew sevenfold to approximately 23,300 units.
In June 2025, Nio announced plans to further expand into the European market between 2025 and 2026, intending to enter five countries—Portugal, Greece, Cyprus, Bulgaria, and Denmark—through a national总代理 model, and launch five models: the EL6, EL8, ET5, ET5 Touring, and the firefly, covering sedan, SUV, and station wagon segments.
Cui Dongshu believes the consensus reached between China and the EU will further consolidate this trend. Simultaneously, the "price commitment" mechanism will also push Chinese automakers to move away from a单纯的 "low-price, high-volume" strategy and accelerate their transition towards premium positioning and localized production布局 in Europe.
Cui Dongshu believes that the unified legal standards and fair evaluation process established by the guidance document will help regulate corporate pricing behavior, prevent disorderly competition, and thus reduce the risk of trade friction. Furthermore, the price constraints will encourage automakers to increase investment in R&D, focusing on high-value-added products, such as enhancing core capabilities in intelligent driving and battery performance, to compete in the EU market based on technological premium rather than low-price strategies, which aligns with the trend of the Chinese automotive industry's upgrade towards premium and intelligent features.
Cui Dongshu analyzed that in the short term, leading automakers will dominate the market凭借 their technological and scale advantages. In the long run, synergy between Chinese and European industrial chains and technical standards is expected to drive an average annual growth of approximately 20% for Chinese electric vehicles in the EU market, providing an example for resolving global trade disputes.
Industry Associations Voice Support: Chinese EV Development Relies on Competition, Not Subsidies On the same day the European Commission published the guidance document, several industry associations, including the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the China Chamber of Commerce to the EU, and the China Association of Automobile Manufacturers, issued密集 statements.
"The 'soft landing' of the electric vehicle case is a vivid example of China and the EU resolving differences through dialogue and consultation within the WTO framework, holding significant importance for maintaining the healthy and stable development of China-EU economic, trade, investment cooperation, and bilateral relations," stated the China Association of Automobile Manufacturers.
Fang Dongkui, Secretary-General of the China Chamber of Commerce to the EU, expressed high welcome and full affirmation for the "soft landing" achieved through dialogue. This important outcome positively addresses the high concerns of industries including the automotive sector, not only benefiting the promotion of stable China-EU economic, trade, investment cooperation, and bilateral relations but also sending a clear and strong signal to the global market.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products also stated that the proper resolution of the EU's anti-subsidy case on Chinese electric vehicles was widely anticipated by upstream and downstream industries involved, contributing to the security and stability of relevant China-EU industrial and supply chains, and upholding the overall situation of China-EU economic and trade cooperation and the rules-based international trade order. Both sides, guided by mutual respect and a spirit of dialogue, successfully achieved a "soft landing" for the case through multiple rounds of consultation.
In Fang Dongkui's view, the competitiveness of China's electric vehicle industry stems from continuous technological innovation and cost and scale advantages formed through full market competition, not reliance on subsidies. The China Association of Automobile Manufacturers also emphasized that the competitive advantage of Chinese electric vehicles originates from continuous technological innovation across the upstream and downstream industrial chain, as well as cost and technological advantages formed through充分 competition within the advantage of a超大规模 market, rather than dependence on subsidies. "The association supports relevant companies in striving for their export rights to Europe based on their actual situation and operational needs."
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