Why BMW and Mercedes are reluctant to impose taxes in the EU to block Chinese electric cars?

As the European Union (EU) is considering imposing high import taxes on electric cars from China to protect manufacturers in the region, BMW and Mercedes have expressed their opposition to this move as it could have counterproductive effects.

The EU will make a final decision on the tax on electric cars from China in November this year (Photo illustration: Car News China).

To encourage the development of the domestic auto industry, China has implemented various measures to support domestic companies producing electric cars and batteries.

This policy has been very successful, but now Chinese auto companies are producing too many cars, exceeding the domestic market demand, leading to concerns that they may sell cars at very low prices, engaging in unhealthy competition with European car manufacturers.

However, both BMW and Mercedes have factories in China, and they believe that erecting barriers to trade with cars and car parts manufactured in China could hinder the transition to electric cars in Europe.

"We don't think the European auto industry needs to be protected in that way," BMW CEO Oliver Zipse told Reuters. "You can't carry out the green transformation of the Green Deal in Europe without a supply source from China."

According to Reuters, Mercedes CEO Ola Kaellenius also agreed, reiterating his opposition to restricting trade with China. In fact, he has previously suggested that the EU should reduce tariffs with China, rather than increase them.

However, not all European car manufacturers share the same view. Renault CEO Luca de Meo believes that Europe should support the region's auto industry and proposes that car manufacturers should join forces to compete with Chinese cars.

The EU investigation into Chinese electric cars is expected to conclude in November this year, but the imposition of import tariffs could be implemented as early as July.