China and the EU agree on steps to resolve their dispute over EV imports
[January 12, 2026] By
CHAN HO-HIM
HONG KONG (AP) — China and the European Union said Monday they have
agreed on steps toward resolving their dispute over the bloc’s imports
of Chinese-made electric vehicles.
A statement by China’s Commerce Ministry said the EU would issue
guidelines on minimum pricing for Chinese auto exporters. It did not
directly mention if the deal involved an end to the tariffs of up to
35.3% that the EU imposed on imports of Chinese EVs in 2024 following an
investigation.
“This is conducive not only to ensuring the healthy development of
China-EU economic and trade relations, but also to safeguarding the
rules-based international trade order,” a statement by the commerce
ministry said.
A “guidance document ” released by the EU gives instructions for EV
manufacturers on making price offers, including minimum import prices
and other details. It said that wide variations in the types of vehicles
made it necessary to set specific minimum import prices "appropriate to
remove the injurious effects of the subsidization."
The EU said the European Commission would assess each offer in an
“objective and fair manner, following the principle of
non-discrimination” and in line with World Trade Organization rules.
The expansion of Chinese EV makers overseas has alarmed automakers in
Europe and the U.S. The EU imposed the tariffs to counter an influx of
affordably priced Chinese EV models into its markets, saying Chinese
automakers had benefited from unfair government subsidies. The U.S.
enacted a 100% tariff on China-made electric cars in 2024.
The value of battery-powered cars imported to Europe skyrocketed from
$1.6 billion in 2020 to $11.5 billion in 2023. Most of the imports were
from Western automakers with factories in China, including Tesla and
BMW.
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 EU officials complained that
Chinese’s homegrown automakers were poised to gobble up market share
by undercutting European car brands on price thanks to Beijing’s
massive subsidies. Those include orders for government fleets,
low-interest loans from state-owned banks, access to cheap land for
factories, tax breaks, and subsidized raw materials and parts from
state-owned industries.
The U.S. tariffs effectively block virtually all Chinese EV imports.
The EU needs affordable electric cars from abroad to achieve its
goals of cutting greenhouse gas emissions by 55% by 2030.
Chinese car brands have been expanding into Europe despite the
higher tariffs. China-manufactured cars rose to 6% of sales in the
EU in the first half of 2025, according to the European Automobile
Manufacturers’ Association (ACEA) and S&P Global Mobility, up from
5% in the same period of 2024.
EU-based manufacturers represented 74% of total EU car sales in the
first half of 2025, the ACEA said. Germany still produced about 20%
of cars sold in the EU, followed by Spain, Czechia and France.
By 2030, Chinese automakers are likely to double their European
market share to 10%, according the consultancy AlixPartners
estimated last year.
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