BMW’s all-electric Mini, manufactured in China, is poised to incur the European Union’s steepest electric vehicle (EV) tariff of 38.1%, according to a source familiar with the matter. This hefty tariff could severely impact the sales potential of the mid-range vehicle, which is priced around €35,000 ($37,345).
Mass production of the electric Mini, a product of the joint venture between BMW (BMWG.DE) and China’s Great Wall Motor Co Ltd (601633.SS), commenced in late 2023. This timeline coincided with the initiation of an EU investigation into EV imports from China. Due to the recent start of production, the joint venture could not provide the European Commission with the detailed data required to be considered a cooperating entity in the investigation. As a result, the electric Mini faces the maximum tariff penalty.
The joint venture’s inability to meet the survey criteria has significant repercussions. Companies deemed cooperative in the EU’s investigation benefit from substantially lower tariffs, ranging between 17.4% and 21%. BMW Brilliance Automotive, another joint venture involving BMW that has been exporting the electric iX3 from China to Europe since 2021, falls into this category and enjoys the lower tariff rates.
BMW has refrained from commenting directly on the tariff situation. However, BMW CEO Oliver Zipse recently criticized the tariffs, describing them as the “wrong way to go.” His statement reflects broader concerns within the German automotive industry about the potential for an escalating trade conflict, which could result in reciprocal tariffs on German car exports to China.
The European Commission has affirmed that joint ventures producing cars in China will be subject to these duties, but has not clarified if newer ventures might qualify for the lower 21% rate reserved for cooperating companies. This lack of clarity adds to the uncertainty facing newer joint ventures like the one producing the electric Mini.
The imposition of the highest tariff rate on the electric Mini represents a critical challenge for BMW and its partner Great Wall Motor Co Ltd. The tariff significantly raises the cost of the vehicle in the European market, potentially diminishing its competitiveness against other mid-range electric vehicles.
Industry analysts warn that such high tariffs could deter investment in new EV production facilities in China aimed at the European market. Furthermore, the situation underscores the fragile balance in international trade relations, particularly in the automotive sector, where the interplay of tariffs can have far-reaching consequences.
