EU cars from China: Mercedes boss Ola Källenius calls for lower tariffs in the EU

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Mercedes boss Ola Källenius: plea for competition

Photo: Thomas Kienzle / AFP

European car manufacturers have been important players on the global market for decades.

But with the increasing focus on electric cars, manufacturers from China are gaining market share.

The EU Commission accuses the Chinese leadership of giving advantages to local manufacturers with illegal subsidies.

In the coming months, the EU Commission will decide whether to impose higher import duties on electric cars imported from China.

But the German car industry in particular is not very enthusiastic about these plans, as Mercedes-Benz boss Ola Källenius made clear.

Instead, he called on the EU Commission to reduce tariffs on electric cars from China.

»Don't raise tariffs.

I completely disagree, I think we should go the other way: take the tariffs we have and lower them," he told the Financial Times.

The EU, in turn, had recently taken the first steps to possibly even retroactively impose import duties on Chinese electric vehicles.

While French car manufacturers like Renault do not have large businesses in China and are campaigning for isolation with tariffs, German car manufacturers rely heavily on business in China.

They fear retaliation from the Chinese government.

Competition with China helps European manufacturers to produce better cars in the long term, said Källenius.

Protectionism is “going in the wrong direction.”

The desire of Chinese companies to export to Europe is a "natural development of competition that must be met with better products, better technology and more flexibility," he added.

»This is a market economy.

Let’s let the competition run its course.”

Mercedes doesn't just rely on China for sales.

About 20 percent of the company's shares belong to the Chinese car manufacturers Geely and BAIC.

The EU Commission has been investigating Chinese subsidy practices since October.

The decision as to whether tariffs will be levied to protect EU manufacturers depends on the result.

The investigation is expected to be completed by November.

“We didn’t ask for this,” said Källenius, referring to the commission’s plans.

»We as a company are not asking for protection, and I believe the best Chinese companies are not asking for protection either.

They want to compete in the world like everyone else.”

History shows that protectionism does not lead to long-term success, said the manager.

"The opening of markets has led to growth in prosperity, especially in the economic miracle of China, which has lifted hundreds of millions of people out of poverty."

Chinese electric cars are currently subject to a ten percent tariff when imported into Europe.

European car manufacturers pay 15 percent when they export to China.

Most German models sold in China are produced there.

Källenius said both sides should aim to create economic win-win situations.

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