(Yicai) Feb. 13 -- More Chinese companies are expected to reach price commitment deals with the European Union, China’s Ministry of Commerce said at a press conference yesterday after the European Commission agreed to waive tariffs for a China-made Volkswagen sports utility vehicle, which will now be imported under a minimum price and quota scheme.

The European Commission said on Feb. 10 that it will allow Volkswagen’s electric Cupra Tavascan SUV coupe, which is manufactured in China, to receive a tariff exemption under a “minimum price + annual quota” arrangement.

China is ready to maintain dialogue and communication with the EU side to foster an open and stable market environment for the growth of the automotive industries in both China and the EU, said ministry spokesperson He Yadong.

Previously, China and the EU, after multiple rounds of consultations, achieved a "soft landing" in the electric vehicle case within the framework of World Trade Organization rules, He said, adding that the outcome has been widely welcomed by the international community and industries on both sides.

China and the EU support Chinese electric vehicle companies in making effective use of price commitments, He said. To that end, the European side has issued a guidance document formulated during the bilateral talks and pledged to carry out assessments in a non-discriminatory, objective and fair manner.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products will encourage and support the companies involved to make full use of the consensus reached, to apply for price commitments and to strive to safeguard their export rights to Europe so as to promote the healthy development of related industries in China and Europe, the CCCME said.

Replacing steep tariffs with price commitments has preserved a key channel for Chinese EVs to access the EU market, helping them avoid the impact of heavy tariffs and in this way stabilizing market access and steadying industry expectations, said Cui Dongshu, secretary general of the China Passenger Car Association. Chinese brands accounted for more than 10 percent of Europe’s EV market last year.

“At the same time, price constraints will force companies to move away from low-price competition and accelerate their shift toward higher-end models and localized production in Europe,” Cui said. “In the short term, leading automakers will dominate the market thanks to their technology and scale advantages. In the long run, the synergy between Europe and China on industrial chains and technical standards will help Chinese EVs achieve annual growth of around 20 percent a year on average in the EU.”

Editor: Kim Taylor