The European Union’s ongoing investigation into subsidies for electric vehicles (EV) made in China and exported to Europe has raised concerns over the potential for negative consequences, particularly a backlash from Beijing, according to BMW’s Chief Financial Officer, Walter Mertl.
Mertl expressed his disapproval of punitive tariffs and suggested that the investigation may inadvertently affect carmakers with minimal sales in China while impacting the entire automotive industry engaged in business with China. He emphasized the risk of an unexpected and significant backlash from Beijing, likening it to a boomerang effect, reported Reuters.
China represents a crucial market for Germany’s top car manufacturers. BMW, for instance, currently exports the iX3 model from China to Europe, with plans to export the Mini starting next year. This leaves BMW exposed to possible EU tariffs on imports from China, as well as potential retaliatory measures by China affecting its sales within the country.
While BMW produces 90% of its cars sold in China locally, Mertl noted that certain materials are imported from Europe as part of their production process.
China has criticized the EU’s investigation, which officially commenced on Thursday, arguing that it violates World Trade Organization rules and could hinder the global growth of EV sales.