Volkswagen Group CEO Oliver Blume has called on the European Union to quickly impose higher tariffs on Chinese plug-in hybrid vehicles (PHEVs). This follows Chinese brands capturing more than a quarter of Europe’s PHEV market in the first half of 2024, disrupting established European automakers.
Chinese PHEVs Grab Nearly 30% of European Market
In the first six months of 2024, plug-in hybrids from Chinese manufacturers made up 28.3% of the European PHEV market, selling over 208,000 units according to analyst Dataforce. Chinese models secured the three best-selling PHEVs in Europe, with BYD’s Seal U leading, followed by the BYD Atto 2 and the Jaecoo 7. Volkswagen’s own Tiguan, previously market leader, dropped to fourth place.
Blume emphasized the urgency of EU action: “We have no time to lose,” urging policymakers to act swiftly to level the playing field for European makers by introducing tariff measures similar to those already applied to Chinese battery-electric vehicles (BEVs).
Tariff Demands Reflect Competitive Challenges
Currently, the EU applies a 10% import duty on most vehicles, with an additional 35% tariff on Chinese-built BEVs. Blume believes similar surcharges on Chinese PHEVs would help address the pricing imbalance. “The BEV rules are working, but the plug-in hybrids are where we are struggling,” he explained.
Reports from German newspaper Handelsblatt suggest the EU is indeed considering new tariffs on Chinese plug-in hybrids, but no official decisions have been announced yet.
Chinese Brands Expand in Europe Amid Domestic Pressures
Chinese automakers have been growing aggressively in Europe, doubling sales to nearly 686,000 units in the first half of 2024. Their overall market share in Europe rose from 5% last year to 9.5% currently, even as the continent’s total vehicle market grew by just 5.9%. Blume noted that Chinese companies face strong competition at home and rely on exports to stay competitive.
Volkswagen’s Response and Factory Concerns
While VW is exploring importing Chinese-built models due to lower costs, Blume ruled out sharing its European factories with Chinese partners, unlike collaborations by some rivals such as Ford and Stellantis. Ford and Chinese owner Geely plan a joint venture in Spain, and Stellantis is producing models from Chinese brand Leapmotor locally.
Blume also revealed plans that could double VW’s job cuts to 100,000, partly due to factory underuse and a 30% cost disadvantage compared to competitors. The automaker aims to cut at least €10 billion in overhead costs. Four German plants are at risk of closing after 2030 if the situation does not improve.
The CEO also called for faster adoption of the EU’s upcoming ‘Made in Europe’ policy, which would push for more local content and incentives tied to European production to reduce reliance on imports.
More discussions on tariffs and industry protection are expected in the coming months as the EU and carmakers navigate rising pressure from Chinese competitors.
Source: autonews.com