High Tariffs Threaten Sales of All-Electric Mini Cooper Made in China
The new all-electric Mini Cooper, manufactured in China through a joint venture between BMW and Great Wall Motor Co Ltd, is facing a significant setback due to the European Union’s (EU) proposed high electric vehicle (EV) tariff of 38.1%. According to a source familiar with the matter, this tariff could have a detrimental impact on the sales prospects for the vehicle.
Production of the all-electric Mini Cooper, priced at around 35,000 euros ($37,345), began late last year, coinciding with the launch of the EU’s investigation. However, due to the early stages of production, the joint venture was unable to provide the detailed information needed to be classified as a cooperating company in the EU investigation. This lack of cooperation resulted in the joint venture being subject to higher tariffs.
According to a document from the European Commission seen by Reuters, companies that cooperated with the investigation were subject to lower tariffs ranging from 17.4% to 21%. This lower tariff rate benefited other BMW joint ventures like BMW Brilliance Automotive, which has been exporting the electric iX3 from China to Europe since 2021.
BMW declined to comment on the matter. However, CEO Oliver Zipse criticized the high tariffs, stating that they were the “wrong way to go.” Zipse’s concerns echo those of other German car manufacturers who fear a potential trade war that could lead to counter-tariffs on German cars exported to China.
The European Commission has stated that joint ventures producing cars in China will be subject to duties, but has not clarified if recently formed ventures would be eligible for the lower 21% rate granted to cooperating companies.
The proposed 38.1% price hike for the Mini Cooper, meant for export from China to Europe, could significantly impact sales at a crucial time when the carmaker is relying on projected all-electric sales to meet tightening carbon emissions targets.
The deadline for imposing provisional measures is July 4, after which the investigation will continue until late October. This leaves room for negotiations between Beijing and Brussels to potentially reach a deal that would mitigate the impact of the high tariffs. Companies affected by the duties can also submit comments and request hearings.
In summary, the new all-electric Mini Cooper made in China is facing a substantial challenge due to the EU’s proposed high EV tariff. The joint venture’s inability to fully cooperate with the investigation has resulted in a higher tariff rate, potentially impeding sales. The situation highlights concerns among German carmakers regarding a potential trade war and the impact it could have on car exports. The EU’s decision to subject joint ventures producing cars in China to duties raises questions about whether recently formed ventures will be eligible for lower tariffs. The impending price hike on the Mini Cooper could hamper sales and hinder the carmaker’s progress in meeting carbon emissions targets. However, there is still time for negotiations between China and the EU to reach a resolution before the provisional measures are imposed.
