German Automobile Association: Technical progress made in anti-subsidy negotiations on electric vehicles between China and the EU
Once the negotiations between the two sides successfully reach an agreement, it is expected to open a new chapter for the cooperation between the Chinese and European automotive industries, especially in terms of technological cooperation and market layout.
On June 25th, during the 2025 Global New - Energy Vehicle Cooperation and Development (Shanghai) Forum, Zhang Lin, the Chief Representative and General Manager of the German Association of the Automotive Industry (China), told Caixin that according to the communication with the competent authorities of China and the EU, the technical part of the negotiations on the anti - subsidy tariff case for imported electric vehicles produced in China between China and the EU has basically been completed.
"Taking the opportunity of the 50th anniversary of the establishment of diplomatic relations between China and the EU in 2025, we hope that the two sides can reach a solution on trade balance," Zhang Lin said.
In April this year, He Yadong, the spokesperson of the Chinese Ministry of Commerce, publicly stated that China and the EU agreed to restart the price - commitment negotiations on the electric vehicle anti - subsidy case as soon as possible. On June 19th, Wang Wentao, the Minister of Commerce, held a video meeting with Valdis Dombrovskis, the European Commissioner for Trade and Economic Security. The two sides had in - depth and professional consultations on trade - related issues such as the electric vehicle anti - subsidy case, export controls, and market access. The two sides unanimously agreed that they should work together and move towards each other to make economic and trade preparations for the important agendas of China and the EU this year and promote the healthy, stable, and sustainable development of China - EU economic and trade relations.
Now, the competition and cooperation between Chinese and European new - energy vehicles are entering a new phase. China not only has the world's largest automobile consumer market but is also the largest automobile producer and manufacturer, with strong domestic sales and export capabilities. At the same time, China is also the origin of intelligent electric vehicle technology. In the aspects of automobile R & D and manufacturing, the two sides have long had a good cooperation foundation and numerous joint - venture companies. The cars jointly produced have long been sold globally.
In recent years, some new reverse - joint - venture models have emerged in the Chinese market. Chinese companies export electrification and intelligent technologies, while German companies provide engineering experience and sales networks. Chinese and German automobile enterprises are surpassing the traditional "market - for - technology" cooperation model with a new "competition - cooperation" paradigm of complementary advantages.
"Avoid zero - sum thinking and embrace technological cooperation," Zhang Lin emphasized. Whether it is the EU anti - subsidy negotiations or the cooperation between Chinese and German enterprises, long - termism and localization thinking are always the keys to breaking the deadlock. In the era of new joint - venture cooperation represented by R & D 2.0, Chinese automobile enterprises going global should break through trade barriers through local cooperation and avoid bringing excessive competition and involution into overseas markets.
Zhang Lin mentioned the "mental challenges" of Chinese automobile enterprises going global several times during the interview. Taking the German BBA (Mercedes - Benz, BMW, Audi) as an example, he said, "German automobile enterprises compete fiercely, but they always support an open market competition environment and respect their competitors. This 'competition - cooperation' model is especially worth learning from by Chinese counterparts."
Technical Negotiations Almost Completed
On October 4, 2023, the European Commission launched an anti - subsidy investigation into electric vehicles imported from China. One year later, on October 4, it voted to pass the final anti - subsidy measures for electric vehicles from China, imposing an additional anti - subsidy tax of up to 35.3% on imported electric vehicles produced in China on top of the existing 10% tariff for at least five years.
After nearly two years of negotiations, the anti - subsidy negotiations are approaching the end.
Zhang Lin told Caixin that the technical part of the negotiations on the anti - subsidy tariff case for imported electric vehicles produced in China between China and the EU has basically been completed, and the subsequent negotiations will test the political wisdom of both sides. He emphasized that the German Association of the Automotive Industry has always opposed using tariff measures to resolve industrial disputes and advocates achieving win - win results through open competition.
Earlier, both sides had sent positive signals about the progress of the negotiations.
On April 8th, when Wang Wentao, the Minister of Commerce of China, met with Valdis Dombrovskis, the European Commissioner for Trade, the two sides agreed to restart the "minimum price commitment" negotiations on electric vehicles. According to EU diplomatic sources, the EU requires Chinese enterprises not only to produce locally in Europe but also to entrust European suppliers and promote technology transfer.
On April 11th, Orlof Gill, the spokesperson for trade affairs of the European Commission, told Caixin that the price commitment, as a possible alternative to the EU's anti - subsidy tax on Chinese electric vehicles, is based on the premise that the price commitment can ensure fair competition and that the Chinese side can effectively solve the problem of unfair subsidies through enforceable and monitorable commitments.
It is worth noting that this kind of price - commitment model was previously applied in the China - EU photovoltaic trade dispute. Chinese photovoltaic products exported to the EU avoided being imposed punitive tariffs through price commitments.
Cui Fan, a professor at the University of International Business and Economics, pointed out to Caixin that setting a minimum price is more beneficial to Chinese automobile enterprises than imposing an anti - subsidy tax. Enterprises can retain the profit from the price difference, while curbing "involution," and this measure complies with WTO rules.
For Chinese automobile enterprises, if the dispute can be resolved through price commitments, it will reserve some room for their development in the European market.
The "Mental Challenges" of Chinese Automobile Enterprises Going Global
Affected by the EU's anti - subsidy tax, data from market research firm Dataforce shows that in February 2025, only 6.9% of the electric vehicles registered in Europe were manufactured by Chinese automobile enterprises, the lowest level since February 2023.
However, Zhang Lin believes that there are also opportunities in the crisis: "German automobile enterprises adhered to local production and R & D when they entered the Chinese market 40 years ago. Now, Chinese automobile enterprises also need to respect local cultures and rules when setting up factories in Europe."
Regarding the competition and cooperation between Chinese automobile enterprises and industrial chain enterprises and German enterprises in the overseas market, Zhang Lin said that Germany welcomes Chinese enterprises to invest and set up factories in Europe. Competition can promote the improvement of technology on both sides. Geely, Changan, and Great Wall have all set up R & D centers or European headquarters in Germany. At the same time, he also pointed out that there is broad space for cooperation between the two sides, including in the fields of auto parts and complete vehicles.
Many Chinese - funded vehicle manufacturers and parts enterprises have considered joint - venture cooperation with local enterprises when entering the European market to better explore the local market.
Currently, BYD announced in December 2023 that it would build a new - energy passenger vehicle production base in Hungary, while Chery chose to invest and set up a factory in Spain. Many Chinese electric vehicle battery companies, including CATL, have also set up factories in the EU.
In addition to local deployment, long - termism is also a key principle for Chinese automobile enterprises going global at present.
Zhang Lin warned that some Chinese enterprises going global may repeat the "all - lose" situation because they over - pursue speed and neglect the requirements of different countries and regions regarding product quality and safety management. In the European market, a single product accident may make a brand difficult to recover for a decade. "German - made cars have always adhered to long - termism in their nearly - century - long global development history, avoiding excessive pursuit of short - term interests in a single market and losing long - term brand value."
Zhang Lin believes that the second half of the cooperation between German automobile enterprises and Chinese enterprises is the stage of experience sharing. German enterprises learn from China's new - technology iteration speed, while Chinese enterprises learn from German quality and safety control systems.
The European market has rather strict requirements for automobile products. From the government to the public, the memory of product quality and safety problems is extremely deep, and this can also cause extremely serious damage to the brand image of enterprises. Zhang Lin called on Chinese counterparts to adhere to the concept of safety and quality while emphasizing speed, establish a full - life - cycle product service system, abandon short - term interest orientation, focus on long - term brand building, and fully consider factors such as cultural and cost differences in different countries and regions to better adapt to the overseas market.
Investment in the China - EU Automotive Industry Continues to Heat Up
Data released by the EU shows that in 2024, China's direct investment (FDI) in the EU reached the highest level in the past five years, with a cumulative investment of 185 billion euros. During the same period, the EU's direct investment in China remained stable, with a cumulative investment of 184 billion euros.
According to a survey conducted by the German Association of the Automotive Industry in the first quarter of this year among its member enterprises in China, more than two - thirds of the enterprises clearly stated that they would increase their investment in China in 2025 and beyond, with a focus on the R & D field.
Zhang Lin emphasized that "German automobile enterprises have completed the layout of new - energy production capacity in the past decade. Now, they need to catch up with China's speed in electrification and intelligent R & D." In the future, more German enterprises will cooperate with excellent Chinese enterprises, including start - ups, in the R & D stage, participating in product verification from the early stage of R & D to better meet market demand.
This kind of technological catch - up has already become a new model for joint ventures between Chinese and German automobile enterprises. Specifically, Leapmotor, with its leading electrification technology and cost advantages, is deeply integrated with Stellantis' global channels and engineering experience. Through the joint - venture company "Leapmotor International," they jointly explore the international market. For the first time, a Chinese new - energy vehicle startup has become the technology exporter to a global leading automobile manufacturer, opening up a new overseas - going model of reverse joint - venture.
This technological catch - up has long become a new model for Sino - German auto joint ventures. Specifically, Leapmotor, with its leading electrification technology and cost advantages, is deeply integrated with Stellantis' global channels and engineering experience. Through the joint - venture company "Leapmotor International," they jointly explore the international market. For the first time, a Chinese new - energy vehicle startup has become the technology exporter to a global leading automobile manufacturer, opening up a new overseas - going model of reverse joint - venture.
This kind of technological catch - up has already become a new model for joint ventures between Chinese and German automobile enterprises. Specifically, Leapmotor, with its leading electrification technology and cost advantages, is deeply integrated with Stellantis' global channels and engineering experience. Through the joint - venture company "Leapmotor International," they jointly explore the international market. For the first time, a Chinese new - energy vehicle startup has become the technology exporter to a global leading automobile manufacturer, opening up a new overseas - going model of reverse joint - venture.
This article is from the WeChat official account "Caixin Auto." Authors: Zhou Xin'er, Wang Jingyang, Li Xiyin. Editor: Li Xiyin. Republished by 36Kr with authorization.