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News - CupraEU-China tariffs threaten Cupra brandVW Group execs warn jobs, Seat and Cupra brands at risk unless EU-China tariffs cut10 Feb 2025 By MATT BROGAN VOLKSWAGEN Group management has warned that Spanish subsidiary Seat-Cupra will be forced to cut output and retrench 1500 employees if the European Union does not lower its tariffs on the brand’s Chinese-made Tavascan electric car by the end of March.
Seat-Cupra chief executive officer Wayne Griffiths told Reuters that failure to cut tariffs on electric vehicles sourced from China – which amount to 20.7 per cent for Seat-Cupra models on top of an existing 10 per cent importation tax – could result in a domino effect for the brands, ultimately risking the future of both.
The warning joins a chorus of executives at several European manufacturers who say additional tariffs on their Chinese-made vehicles are causing collateral damage to domestic companies and jobs, countering the tariff’s original intention.
In an interview with Reuters, Mr Griffiths said the tariff levied on a vehicle costing between €50,000 and €60,000 ($A82,400 and $A98,900) caused Seat-Cupra to miss its 2024 calendar year targets, and will cost it “hundreds of millions of euros in 2025”.
“We do not have much time,” he stated. “We need to get to a solution within the first quarter.”
Mr Griffiths said tariff levels would need to be reduced to “as close as possible” to the original 10 per cent if it was to avoid risking Tavascan production, associated jobs, and ultimately the Cupra and Seat brands.
“Cupra is our game-changer – it is what made us profitable as a company,” he added.
“If Cupra is at risk, Seat is at risk.”
Reuters says Volkswagen Group and Seat-Cupra executives have held regular meetings on the matter with European Union officials, while Spanish prime minister Pedro Sanchez has also appealed to European Commission president Ursula von der Leyen to solve the issue and avert major job losses.
Mr Griffiths said that if the tariff is not significantly reduced – or removed – within the first quarter of 2025, Seat-Cupra will be forced to cut the vehicle from its line-up, a move he says would create obvious issues for the brand’s EU average fleet emissions targets.
As is the case in many emissions reduction schemes, European vehicle manufacturers may either buy carbon credit from electric vehicle manufacturers, known as ‘pooling’, or cut production of internal combustion engine vehicles to lower their average emissions.
To date, Volkswagen Group has refrained from joining a pool, saying in December that it hoped to close the emissions gap via electric vehicle sales.
“We cannot fix that overnight,” continued Mr Griffiths. “So, what do you do? Reduce combustion-engine output and start firing people.
“That is what’s going to happen if we cannot get a fix.”
BMW, Mercedes-Benz, Tesla and several Chinese electric vehicle manufacturers have filed challenges to the new tariffs in the Court of Justice of the European Union. However, these cases can take 18 months of more to be heard.
Mr Griffiths said that although Seat-Cupra has not ruled out legal action, it also cannot afford to wait.
Locally, Cupra sold just 2339 vehicles across the 2024 calendar year, down a significant 37.9 per cent (1426 units) on the preceding year, contributing to a significant slowing of sales for Volkswagen Group brands.
In 2024, Audi sales fell 19.5 per cent to 15,333 units, Bentley 20.1 per cent to 183 units, Skoda 37.3 per cent to 5015 units, and Volkswagen 16.8 per cent to 36,480 units.
High-end sports brands bucked the trend with Lamborghini sales climbing 13.3 per cent to 273 units and Porsche 16.1 per cent to 7029 units.  Read more31st of January 2025  Trump tariff threats rattle EU automakersTrump’s proposed tariffs stand to hit exposed EU automakers6th of October 2024  EU votes yes to Chinese BEV tariffsFollowing a somewhat divided vote, the EU presses on with Chinese BEV tariffs28th of August 2024  Canada joins anti-China EV trade warFollowing EU and the US, Canada readies to impose 100pc tariff on Chinese EVs20th of August 2024  Chinese EV sales drop as EU tariffs take holdEuropean imported EV sales fall up to 45 per cent as anti-China import tariff felt13th of August 2024  China takes EU’s EV tariff stoush to WTOMinistry of Commerce say EU’s action undermines global cooperation on climate change18th of July 2024  EU may lower Chinese tariff for BMW, VWCompromise set to impact European OEMs which export EVs from China to Europe9th of July 2024  SAIC demands new EU tariff hearingBeijing and SAIC united in demanding new European Union tariff hearing for imported EVs |
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