Brussels rejected China proposal for 30,000 euro minimum sales price in EV dispute, sources say

Brussels rejected a proposal by the Chinese government for imported electric vehicles made in China to be sold at a minimum price of 30,000 euros ($32,946), three sources said, a move Beijing hoped would avert EU tariffs being imposed next month.

The European Commission said it had dismissed minimum price offers from EV makers in China a month ago as part of an anti-subsidy investigation that has thrown Beijing and the European Union into their biggest trade dispute in a decade.

Specific details of the compromises being offered in negotiations between the two have not previously been reported.

The three sources familiar with the matter declined to be identified because the details are confidential.

China's Commerce Ministry and the Commission did not immediately respond to requests for comment. The Commission has previously declined to comment on negotiations.

In rejecting the Chinese proposal, Brussels said at the time that it was not only about the prices carmakers charge for their China-made EVs, but also the subsidies they received producing them and removing the impact of such support payments.

The Commission had declined to provide details of the offers, by which makers of EVs in China pledged to respect certain pricing thresholds to avoid flooding the European market with cheap vehicles the bloc says local rivals cannot compete with.

Currently, Chinese carmakers such as SAIC and BYD are pricing their EV models just above 30,000 euros in Europe even though they sell them at a fraction of the price in their home market, highlighting their flexibility but also the appeal for them in selling in Europe.

BYD's Seagull, a smaller EV slated to come to Europe next year, is expected to be priced just under 20,000 euros.

TIME FOR A DEAL RUNNING OUT

Details about the offers come as time for a negotiated deal is getting tighter, with the Commission last week saying that tariffs of up to 45% on EVs built in China would be imposed from Oct. 31 for five years unless both sides agree on a Plan B.

On Tuesday, China imposed temporary anti-dumping measures on imports of brandy from the EU, hitting French brands including Hennessy and Remy Martin, days after the 27-state bloc voted for the EV tariffs.

China’s Commerce Ministry has previously said it was looking to negotiate an alternative to tariffs that would involve some form of “flexible pricing commitment”. It did not provide details.

The Commission has said it is prepared to re-consider other price undertakings, involving minimum prices and import quotas, as negotiations continue.

A solution could be an individually calculated minimum price for each carmaker and possibly per model type, depending on size of car and its range, the sources said.

One of the sources said that minimum price levels of 35,000 to 40,000 euros would serve as a better yardstick for talks.

($1 = 0.9106 euros)