The China-made electric Mini faces massive EU tariff blow, BMW Group’s costs cut plan backfires.
In a classic case of cost-cutting gone wrong, BMW’s decision to manufacture its all-electric Mini in China is set to backfire spectacularly. According to Reuters, the roughly €35,000 (RM176,500) electric Mini, produced by a BMW and Great Wall Motor joint venture, is likely to be slapped with a massive 38.1% tariff under the EU’s provisional plans.
The Irony of BMW’s China Gambit
It’s a potential terminal blow for the mid-range car’s sales prospects in Europe, where BMW was undoubtedly hoping to make a big splash with its “affordable” electric offering. The irony is palpable – in a bid to cut costs, BMW opted to manufacture the electric Mini in China, only to face crippling tariffs that could render the vehicle uncompetitive in its target market.
Failed to Cooperate, Failed to Escape High Tariffs
According to the source, the BMW-Great Wall joint venture failed to provide the European Commission with the level of detail required to be classified as a company cooperating with the investigation. As a result, it missed out on the lower tariffs of 17.4%-21% applicable to companies that did cooperate, such as BMW Brilliance Automotive, another BMW joint venture that produces the electric iX3 for export to Europe from China.
BMW’s CEO Cries Foul, But Is It Too Late?
BMW’s CEO Oliver Zipse has called the tariffs the “wrong way to go,” echoing concerns from other German carmakers fearful of a trade war that could lead to counter-tariffs on cars exported from Germany to China. However, it may be too little, too late for the electric Mini, as a 38.1% price hike could significantly dent sales at a time when BMW is counting on every projected all-electric sale to meet tightening carbon emissions targets.
The Deadline Looms, But Hope Remains
While the deadline for imposing provisional measures is July 4, the investigation will continue until late October, leaving time for Beijing and Brussels to make a deal to soften the blow. After all, already fattened the EU’s coffers with their last €372,827,000 fine over diesel emissions collusion with VW and Daimler. Maybe there will be room to negotiate the tariffs as it’s in the EU’s interest to take ICE vehicles off the market.
