Europe pushes ahead with China EV tariffs despite Germany’s objection
The European Union has voted to move forward with its plan to impose tariffs on electric cars imported from China, despite recent moves by Germany to attempt to block the proposal.
Chinese EV production has soared lately, as the country’s efforts to secure mineral contracts and build up its local auto manufacturing base have borne fruit.
Along with that drastic rise in EV production has come a rapid rise in EV sales within the country – and a rise of exports as well.
As those exports have hit international shores, audiences from Australia to Europe have found Chinese EVs as quite a reasonable value proposition when compared to domestic manufacturers, and sales have risen overseas as they have domestically.
This has been troubling for domestic European manufacturers, who have found it tough to keep up with the low prices that Chinese manufacturers are able to sell their cars at.
The EU has accused China of “flooding” its market with these EVs, and of unfair subsidy practices towards its local auto industry. (The EU also subsidizes EVs)
As a result of this, Europe decided to impose tariffs on Chinese EVs, with a sliding scale based on which manufacturers it deems most out of compliance with its investigations. Those numbers have been modified as negotiations have gone on, but have currently landed between 7.8% and 35.3%. This is notably much lower than the US tariff, which was recently raised from 25% to 100% and went into effect just a week ago.
Europe votes to impose tariffs, with German opposition
Today, the European Commission took a final vote to impose the tariffs. 10 member states supported the plan, 12 abstained, and 5 voted against, with the most significant opposition coming from the EU’s most populous country and the one with its largest auto industry, Germany.
While the initial vote passed easily with little opposition and many abstentions, including from Germany, the country changed its position and decided to oppose the tariff at today’s vote.
Germany had hoped to rally more nations to vote against the tariffs, but it was always going to be a high bar, requiring 15 countries and 65% of the EU population to overturn the previous vote. As of this week, it became apparent that Germany was never going to get there.
At first glance it seems incongruous that the country with the largest auto industry in Europe might oppose tariffs that are intended to protect the European auto industry. But the reason for this is because German automakers sell a lot of high-end and profitable vehicles to China, and fears retaliatory tariffs of the sort that often come up when countries erect trade barriers.
China specifically has been quite effective at targeting its retaliatory tariffs in the past. In response to trump-era tariffs, China enacted a 25% tariff on US goods in 2018 which, among other things, devastated the US soybean industry. China has already started investigating several EU product categories like brandy, dairy and pork products, and related European industry groups feel “abandoned” by their governments in face of this threat.
Beyond the threat of tariffs, Chinese consumers have been increasingly looking inward as well, abandoning foreign brands partially due to nationalistic sentiment as they feel that other countries have treated them unfairly.
So Germany sees how a Chinese tariff on European autos might hasten its decline in the world’s (just-recently-2nd) most populous country, cutting it off from 1.4 billion potential consumers.
Its vote against may have been tactical, though – an attempt to have their cake and eat it too. Germany may want the protective effects of a European tariff, allowing them to continue to sell to domestic buyers without being undercut by Chinese brands, but also want China to think that they were trying to stop the tariffs, thus lessening Beijing’s desire to retaliate against poor little Germany which did everything in its power to stop these tariffs.
European tariffs are also significantly lower than those recently imposed by the US, and Europe has been actively talking to Beijing and has modified tariff pricing and may modify it more going forward. This may be another tactical decision – by showing that it is more willing to work with China than the US is, and by setting a more “reasonable” tariff, the EU can portray itself as less extreme and thus less worthy of retaliation.
Electrek’s Take
If you’d like to read 3,300 words on what I think about this whole tariff idea, head on over to my article “Tariffs on China aren’t the way to win the EV arms race – getting serious on EVs is.” I promise you it’s a pretty good one. While the article is about the US tariff, much of it applies to Europe as well.
The fact is, tariffs are popular, but usually don’t work very well. We have a lot of examples of this happening, and while “most economists agree” should not be a silver bullet rule for interpreting the world, in this case, I think they’re generally right.
At best, I think these tariffs will offer a temporary reprieve to local manufacturers – which we have already seen they are more than willing to use to delay their plans and put themselves back into the exact same position they’re already in: behind.
Meanwhile, what it immediately does is increase prices for EU consumers, and reduce EU manufacturers’ desire or need to compete on price. In a time where every country around the world has recently struggled with inflation, making one of the things that households spend the most money on more expensive doesn’t seem too wise.
This will also make people less willing to replace gas guzzlers with newer, cheaper-to-run electric vehicles, which means not only sustained high fuel costs for those families, but sustained high climate and health costs from the increased climate change that comes from using those old vehicles.
So I just don’t see this as the smart choice. Germany eventually came around to the right decision here – but it could have exercised leadership earlier, instead of playing tactical games and trying to appear as if it’s on both sides.
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If you’re considering going electric, May will be a great time to score a deal on an EV lease. Automakers are slashing lease prices on some of the most popular EVs to move inventory – here are four standouts.
Nissan Ariya SUV
The Nissan Ariya SUV has an MSRP of $41,805. Its lease term is 36 months, with $4,409 due at signing and a mileage allowance of 10,000 a year. Monthly payment? A sweet $129!
Nissan cut the 2025 Ariya Engage’s price by $144 in April, so it now has an effective monthly cost of $251 – that’s seriously affordable for an electric SUV. If you’re already a Nissan driver, then you’re going to get an even better deal, because Nissan is offering a $1,000 loyalty discount on the Ariya, which brings its effective cost down to $224 per month.
CarsDirect, which sniffed out this deal, thinks this Ariya deal will be in place until Memorial Day, so take advantage of tariff-free pricing while you can.
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Honda Prologue SUV
The Honda Prologue SUV has an MSRP of $48,850. Its lease term is 36 months, with $1,399 due at signing and a mileage allowance of 10,000 a year. The monthly payment on the Prologue is $239.
The 2024 Honda Prologue has up to $18,800 in rebates, and the price includes a $1,000 lease loyalty discount or conquest offer. In California and other ZEV states, the EX has an effective cost of just $278 per month; in other parts of the US, pricing will be around $30 higher. This offer ends July 7.
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Tesla Model 3
The Tesla Model 3 has an MSRP of $43,880. Its best lease term is 24 months, with $1,044 due at signing and a mileage allowance of 10,000 a year. The monthly payment on the Model 3 is $349.
The 2025 Tesla Model 3 still has the $7,500 federal government EV rebate. Several months ago, Tesla reduced the amount due at signing on all Model 3s. And for those who want to lease a Long Range Model 3, the effective cost can be as low as $393 per month.
You can lease the Model 3 for 36 months, but the folks at CarsDirect found that the better deal will be had on 24-month leases. They compared the Model 3’s MSRP to the 2025 Lexus IS 300 F Sport’s MSRP, which is nearly identical, and the Model 3 was around 30% cheaper to lease.
Acura ZDX
The 2024 Acura ZDX has an MSRP of $65,850. Its best lease term is 36 months, with $4,699 due at signing and a mileage allowance of 7,500 a year. The monthly payment on the ZDX is $299.
The 2024 ZDX is Acura’s cheapest vehicle to lease because it features up to $29,450 in lease cash. However, the best deal is limited to California and ZEV states. If you cash in on a loyalty discount or conquest cash, the effective cost is $430 per month. This offer runs til June 30.
Click here to find a local dealer that may have the Acura ZDX in stock. –trusted affiliate copy
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Ford (F) reported its first-quarter earnings, beating Wall Street’s revenue and EPS expectations. However, with Trump’s auto tariffs, Ford is suspending full-year guidance. Here’s a breakdown of Ford’s Q1 2025 earnings
Ford Q1 2025 earnings preview
After crosstown rival General Motors cut its full-year financial guidance last week, investors are waiting to see if Ford will follow suit.
Ford’s previous 2025 forecast called for EBIT of $7 billion to $8.5 billion and capital expenditures between $8 billion and $9 billion.
The biggest threat is Trump’s new auto tariffs, which include a 25% duty on imported vehicles and many parts. Since Ford builds a greater percentage of vehicles in the US than any other major automaker, outside of Tesla, it isn’t expected to see as big of an impact.
CEO Jim Farley called it “an opportunity for Ford,” during an interview with CNN last week, saying the company has a “different footprint, a different exposure for tariffs.”
Ford imports around 21% of the vehicles it sells in the US, while GM imports around 46%. According to Estimize, Wall St expects Ford to post Q1 EPS of $0.0 on revenue of $38.02 billion.
The company reports earnings for each of its three business units, Ford Blue (gas-powered vehicles), Model e (electric vehicles), and Ford Pro (commercial and software business).
In the fourth quarter, Ford’s EV unit (Model e) lost another $1.4 billion while Pro and Blue each reported an adjusted EBIT of $1.6 billion.
Financial breakdown
Ford beat Wall Street estimates, reporting first-quarter revenue of $40.7 billion with an adjusted EPS of 0.49.
- Q1 2025 Revenue: $40.7 billion vs $38.02 billion expected.
- Q1 2025 Adjusted EPS: $0.49 vs $0.0 expected.
The company posted adjusted EBIT of $1 billion, down 63% from Q1 2024. Ford said its first-quarter EBIT suffered a nearly $200 million hit from added tariff costs, primarily in Ford Blue and Ford Pro.
Ford Pro generated an EBIT of $1.3 billion, Ford Blue $96 million, and Ford Model e reported an EBIT loss of $849 million.
For Model e, the company is focused on improving gross margins and “exercising a disciplined approach to investments in battery facilities and next-generation products.” Although still a nearly $1 billion loss, it’s still a $500 million improvement from Q1 2024.
Ford said higher Model e revenue was driven by new EVs launching in Europe, like the electric Explorer and Capri.
The company said its “Power Promise” promotion, which includes a free home charger and several other benefits, has helped drive demand in the US.
Although it’s tracking within its previous full-year adjusted EBIT guidance of between $7 billion and $8.5 billion, Ford is suspending full-year guidance due to the uncertainty surrounding tariffs.
Ford estimates the full-year gross cost of tariffs to be around $2.5 billion. It expects a tariff-related net adverse adjusted EBIT impact of about $1.5 billion for the full year 2025.
Ford also extended its “From America, For America” campaign last week. The promo includes employee pricing on most 2024 and 2025 models and now runs through July 4.
Check back for more info from Ford’s first quarter conference call. Ford is also hosting its annual meeting on Thursday, May 8, where we should learn more about its EV plans and how it will navigate the new tariffs.
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