A potential 21.3% import tariff on Chinese-made electric vehicles, proposed by the European Commission, has thrown Volkswagen’s CUPRA brand into a state of crisis. The brand’s CEO, Wayne Griffiths, has warned that the tariff could effectively wipe out the company’s flagship electric SUV, the Tavascan, due to its manufacturing in China.
Griffiths explained that raising the price of the Tavascan, which retails for around 52,000 euros ($57,500), to offset the tariff would be unrealistic in the current European economic climate. Shifting production to another location is also not a viable option, as CUPRA has already invested significantly in expanding capacity at its joint venture plant in China.
The potential impact of the tariff extends far beyond the Tavascan. Without the anticipated sales of the SUV, CUPRA would struggle to meet the EU’s carbon dioxide reduction targets, leading to substantial fines. This could trigger production cuts and job losses at the company’s base in Spain.
Griffiths’ statement reflects the growing concern among European carmakers about the unintended consequences of the EU’s investigation into Chinese subsidies. While the commission aims to protect domestic manufacturers, the proposed tariffs could inadvertently harm the very companies they seek to safeguard.
This situation highlights the complex challenges faced by the automotive industry in a globalized world. Balancing trade protection with the need for innovation and cost efficiency is a delicate act, with far-reaching implications for both manufacturers and consumers.
