EU may cut China EV import tariffs for Volkswagen and BMW, sources say

By Christina Amann

BERLIN (Reuters) -The European Commission has signalled to Volkswagen and BMW that it may consider lowering tariffs on the two carmakers' imports of China-made EVs, two sources with knowledge of the matter said.

The European Commission was willing to classify the two carmakers as so-called cooperating companies, the sources said, making them eligible for a 20.8% tariff on their China-made models, down from a tariff of 37.6% under current plans.

BMW's China-made electric Mini and Volkswagen's Cupra Tavascan, produced by the SEAT brand, were not part of Brussels' sample analysis in the run-up to the tariff announcement, which means they were automatically subjected to the highest tariff level.

If agreed, it would be a first, early compromise by Brussels on tariffs that will hurt some of Europe's top car manufacturers because they make cars in China and import them to the region.

The German car industry has also opposed the tariffs because it is worried about retaliation from China, where German automakers made a third of their revenue last year. U.S. carmaker Tesla has asked for its own tariff rate.

The decision was not yet final, said the two sources, who spoke on condition of anonymity due to the sensitivity of the matter. Volkswagen declined to comment. BMW was not immediately available for comment.

Brussels has until autumn to make a final decision on the tariffs, which are preliminary for now.

A spokesperson for the European Commission said it was analysing a number of requests from companies that were not yet producing battery-electric cars in China during the investigation, and would make a final assessment later in the process.

"The parties concerned will be informed of the Commission's proposal and will have the opportunity to comment in advance of the publication of any definitive measures," the person added.

(Reporting by Christina Amann; Additional reporting by Phil Blenkinsop and Josephine Mason; Writing by Victoria Waldersee; Editing by Christoph Steitz and Mark Potter)