Brussels has granted the first exemption from countervailing duties for an electric vehicle (EV) manufactured in China. This comes after the European Commission accepted a request from Volkswagen (Anhui) Automotive to sell its Cupra Tavascan model within the European Union at a price that "equals or exceeds a proposed minimum import price," according to Bloomberg.
This move exempts Volkswagen (Anhui) Automotive—the group's manufacturing arm in China—from paying the 20.7% countervailing duty imposed on the model since 2024. The exemption follows the company’s commitment to a specific "import quota" and to investing in "major EV battery-related projects within the EU," Bloomberg reported.
While the Commission did not disclose details regarding the minimum price floor or the agreed-upon quota, the company had submitted its request last October.
Bloomberg described the agreement as the "first deal" under the new European system, which allows automakers to apply for exemptions on a per-model basis for EVs made in China. The report noted that the framework announced last month "signals a significant cooling of trade tensions between Brussels and Beijing," while enabling the EU to "secure investment pledges" and protect its local industry from an influx of low-cost vehicles.
The exemption arrives as Volkswagen pours billions of dollars into its facility in China’s Anhui province. According to Bloomberg, this step is likely to "boost margins" that were previously squeezed by the original tariff structure. Furthermore, this move could pave the way for other manufacturers, such as BYD, to pursue a similar path into the European market.
