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Europe shouldn't be afraid of Chinese electric cars, says Mercedes-Benz CEO

George Glover   

Europe shouldn't be afraid of Chinese electric cars, says Mercedes-Benz CEO
  • The CEO of Mercedes-Benz called on the European Union to cut tariffs on Chinese electric cars.
  • "That is the market economy. Let competition play out," he told the Financial Times.

The boss of Mercedes-Benz wants the European Union to cut tariffs on Chinese electric cars, which he argues will force European companies to make better vehicles.

In an interview with the Financial Times published on Tuesday, Ola Källenius rallied against protectionism and said lawmakers in Brussels should reduce, not raise, duties on Chinese EV makers such as BYD.

Chinese cars face 10% tariffs in Europe, which is lower than the 15% levy imposed on European cars sold in China.

"Don't raise tariffs," he told the FT. "I'm a contrarian, I think go the other way around: take the tariffs that we have and reduce them … that is the market economy. Let competition play out."

"It has been opening up markets that has led to wealth growth, especially in the economic wonder of China, that has lifted hundreds of millions of people out of poverty," Källenius added. "If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case."

The EU's cabinet is investigating whether Beijing subsidizes Chinese carmakers to help them undercut their European rivals.

BYD's cheaper, smaller cars helped it overtake Tesla as the world's top EV seller in 2023 — and it's announced plans to build a production plant in Hungary as part of a bid to ramp up its expansion into Europe.

France's Renault and Jeep owner Stellantis have previously called for the EU to take steps to prevent the continent's carmakers being wiped out by their Chinese rivals.

"The Chinese offensive is possibly the biggest risk that companies like Tesla and ourselves are facing right now,'' Stellantis CEO Carlos Tavares said last month. "We have to work very, very hard to make sure that we bring out consumers better offerings than the Chinese."

However, German carmakers such as Mercedes-Benz and Volkswagen have pushed back against the EU's ongoing probe. China accounts for over a third of Mercedes-Benz's worldwide sales, while it also signed a deal with BYD last year to use the Chinese company's LFP Blade batteries in its own EVs.

Reports last September suggested Mercedes-Benz is planning a 2025 launch for the CLA sedan that will use BYD's LFP batteries and have a range of more than 450 miles.

Daimler, the owner of Mercedes-Benz, and BYD have also worked together in the past, setting up an EV joint venture in China as long ago as 2010, per Electrek.


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