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The European Commission's expected move to hike tariffs on Chinese electric vehicles is set to kick off a round of talks that Chinese executives hope will soften the blow for the world's biggest EV industry. The provisional tariffs, expected to be announced by June 5, will be a sticker shock representing billions of dollars in new costs for Chinese electric car makers…But both Europe and China have reasons for wanting to strike a deal…China’s EV industry needs profitable exports to the world's third-largest economy to counter falling margins at home, while German automakers want access to China's auto market and EV partnerships to drive costs down…The European decision would come after the United States quadrupled tariffs on Chinese EVs to 100% – a move Tesla's Elon Musk denounced after previously warning Chinese automakers were on track to "demolish most other car companies". Tesla, the largest EV exporter from China, also faces the threat of higher EU tariffs…European automakers have teamed with newer Chinese EV makers to bring EVs to market more cheaply and quickly. Volkswagen and BMW in April pledged more than $5 billion to expand research and production in China. In 2023, almost 29% of cars made by German automakers were sold in China, trade data shows. Europe is the most important overseas market for Chinese EV makers. With cut-throat competition squeezing margins in China, EV makers such as BYD can sell cars in Europe for more than twice the China price. That leaves some room to absorb additional tariffs, analysts say…Chinese EV makers and suppliers are also investing in Europe. Xpeng entered the French market this month. At the opening of Nio's Amsterdam showroom last week, founder William Li said the Chinese EV maker would forge ahead in Europe…BYD is building an EV plant in Hungary and eyeing a second European plant. Chery Auto, China's largest automaker by export volume, is partnering with Spain's EV Motors to open its first European plant in Catalonia. State-owned SAIC, China's second-largest auto exporter, is searching for its first Europe plant…CATL, the world's largest battery maker, has ramped up production in Europe. Other Chinese battery suppliers are helping France build its "battery valley".

A year after Chief Executive Officer Oliver Blume defended his turnaround plan for Volkswagen AG, investors find themselves back at square one…When Blume addressed shareholders at the company’s annual general meeting on Wednesday, he emphasized patience, saying Volkswagen’s shift to the electric age comes as the industry “undergoes its biggest transformation ever.”…Investors, however, will want to see clear progress on tackling the company’s fraught transition to electric vehicles, which has included a number of botched new model rollouts and declining relevance in China, the biggest EV market. And now, with Chinese EV makers expanding in Europe, Volkswagen is under growing pressure to produce an electric car that more people can afford…Volkswagen plans to unveil a €20,000 ($21,722) EV in 2027 to compete with the likes of BYD Co. The Chinese manufacturer is weighing two plants in Europe and aims to bring its Seagull hatchback to the region next year at a price below €20,000. Both Renault and Stellantis have been looking for partnerships to lower the cost of their electric offerings. Stellantis plans to sell EVs co-developed with China’s Leapmotor in Europe from September. Renault, which is cooperating on battery-powered vans with Volvo AB, last year unveiled a compact electric passenger car that will be sold from 2026 for less than €20,000…Meanwhile, Volkswagen’s EV project with China’s Xpeng Inc., with first models for the market there to be released in 2026, is progressing at “enormous speed,” Blume said…Competition in China’s battery electric vehicle market has put VW’s market share into a tailspin just as new rivals such as BYD have started gaining sales in Europe — exposing it to new challenges and geopolitical risks such as tariffs.

China's Geely Holding Group on Wednesday said it would launch a series of hybrid models in the first half of next year equipped with its next-generation, more fuel-efficient engine. Geely's engine achieves a thermal efficiency of up to 46.1%, according to a product certificate issued by the government-owned CATARC Huacheng Certification Co. Geely said this was among the highest in the world, and would reduce fuel consumption and extend driving range…Plug-in hybrids are the fastest growing fuel-type sector in China thanks to their affordability, and competition in the sector is intensifying.