Mercedes-Benz boss calls on Brussels to lower tariffs on Chinese electric cars

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The boss of Mercedes-Benz has called on Brussels to lower tariffs on electric cars imported from China, while the European Commission is considering raising import duties as it investigates Beijing's subsidies for its car industry.

Chief executive Ola Källenius said increased competition from China would help European carmakers produce better cars in the long term, adding that protectionism was “going down the wrong path” .

“Don't raise tariffs. I'm a contrarian and I think the opposite should be done: take the tariffs we have and lower them,” he told the Financial Times.

He added that Chinese companies seeking to export to Europe were “a natural progression of competition that requires better products, better technology and greater flexibility to meet”. “This is a market economy. Let competition play out.”

The committee is investigating whether Chinese carmakers are receiving subsidies from Beijing that allow them to lower the prices of cars exported to Europe, undermining the region's own manufacturers.

French automakers such as Stellantis and Renault do not have large operations in China, but they have been outspoken about the threat from Chinese electric vehicles. However, the investigation has faced strong opposition from German carmakers, which rely on China for a large portion of their sales and profits.

German executives worry about possible retaliation from Beijing and Chinese consumers, while local brands such as BYD have taken market share from Western companies in the world's largest electric vehicle market.

More than a third of Mercedes-Benz cars are sold in China, which accounted for 40% of Volkswagen sales last year.

Chinese automaker Geely and Chinese government-controlled SAIC Motor own a fifth of Mercedes-Benz.

“We didn't ask for this [probe]”, Kallenius said. “We as a company did not ask for protection, and I believe that the best Chinese companies did not ask for protection either. They want to compete in the world like everyone else. ”

He fully defended the open market, saying: “Open markets have brought about growth in wealth, especially China's economic miracle, which has lifted hundreds of millions of people out of poverty.

“If we believe that protectionism will bring us long-term success, then I believe history tells us that it does not.”

Currently, Chinese electric vehicles are subject to a 10% tariff when imported into Europe. European carmakers pay a 15% tariff on exports to China, which is part of the reason why most German models sold in China are made there.

Kallenius said there needs to be a “level playing field” and both sides should “pay attention to establishing a win-win economic situation.”

He added: “We live in a pragmatic world and realize that people have some expectations about the rules of the overall market economy . . . But if we seek wealth by increasing protectionism, we are on the wrong track.”

Stratis and Renault are in a tougher situation in China than their German rivals, and the French government is actively seeking measures against Chinese companies.

Stellantis Chief Executive Carlos Tavares warned last year that the EU's auto industry, which employs some 13 million Europeans, risked being wiped out by Chinese competition, just as the continent's once-booming solar panels sector Same as the industry.

Volkswagen AG's Porsche, which imports all its cars in China, vowed last year to fight potential new EU tariffs on Chinese automakers. The strategy of building cars in China and selling them abroad is a rare one for most foreign automakers, including Porsche parent Volkswagen, which have largely shifted to direct production in China.