BMW’s electric Mini faces steep tariff hike in EU

A source familiar with the issue said on Friday that BMW’s all-electric Mini assembled in China is set to be hit with the highest EV tax of 38.1% under the EU’s provisional plans, potentially terminally impacting the mid-range car’s sales prospects.

Introduction

BMW’s all-electric Mini, manufactured in China through a joint venture with Great Wall Motor Co Ltd, faces a significant hurdle as the European Union plans to impose a high tariff of 38.1%.

This tariff, part of the EU’s measures pending an investigation, could severely impact the vehicle’s competitiveness in the European market.

Production Background

Production of the electric Mini, priced around 35,000 euros ($37,345), began recently under the BMW-Great Wall joint venture.

However, due to the early stage of production, the joint venture couldn’t provide sufficient detailed information to the EU’s satisfaction for cooperation in the investigation.

Tariff Details

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According to sources, companies cooperating with the EU’s investigation are subject to lower tariffs ranging from 17.4% to 21%.

This includes BMW Brilliance Automotive, another joint venture that has been exporting the electric iX3 to Europe from China since 2021. The inability of the BMW-Great Wall joint venture to meet cooperation criteria has resulted in the highest tariff imposition.

Industry Response and Concerns

BMW has refrained from commenting directly on the tariff situation. However, BMW CEO Oliver Zipse recently criticized the tariffs, expressing concerns over potential repercussions, including a trade war scenario with China retaliating against German car exports.

Sales and Market Impact

A 38.1% tariff increase on the Mini could significantly reduce its sales potential in Europe. This comes at a critical time when BMW aims to meet stringent carbon emissions targets, relying on electric vehicle sales.

The outcome of the EU’s decision could influence BMW’s strategy and production plans for the Mini going forward.

Future Outlook

The EU plans to finalize provisional measures by July 4, with the investigation continuing until late October.

There remains a window for negotiations between Brussels and Beijing to mitigate the impact. Companies affected will have the opportunity to submit comments and request hearings post the imposition of provisional duties.

Conclusion

The impending tariff on BMW’s electric Mini highlights the complexities and challenges faced by automakers amidst global trade dynamics and environmental regulations.

The outcome will not only affect BMW’s business strategy but also potentially shape the future landscape of electric vehicle imports into Europe.

This development underscores the pivotal role of regulatory decisions in shaping the competitive landscape for electric vehicles, impacting both manufacturers and consumers alike.