After months of back-and-forth and the looming threat of a full-blown trade war, the European Union and China are reportedly nearing a deal that would replace the EU’s controversial tariffs on Chinese electric vehicles with a minimum price undertaking.
It looks like sanity might prevail, or at least, a “soft landing.”
According to a new report from Associated Press, the European Commission and the Chinese government have agreed on a framework that allows Chinese automakers to avoid the punitive duties, which climbed as high as 35.3% for some manufacturers, by committing to a minimum import price for their EVs sold in Europe.
The European Commission published a guidance document on Monday detailing how these “price undertakings” will work. Essentially, instead of paying a tariff at the border, Chinese manufacturers like BYD, Geely, and SAIC can agree to sell their vehicles at or above a certain price floor. This floor is intended to offset the “unfair subsidies” that Brussels claims Beijing has been pouring into its domestic EV industry.
The report notes that the deal isn’t a blanket pass; each manufacturer has to submit its own offer, which the EU will assess individually. The criteria include ensuring the price is high enough to remove the “injurious effects” of subsidies and potentially detailing future investments within the EU.
China’s Ministry of Commerce seems pleased with the progress, calling it an “important breakthrough” that reflects a willingness to resolve differences through dialogue. This is a significant shift from the rhetoric we saw late last year when Beijing was threatening retaliatory tariffs on everything from European pork to brandy.
Furthermore, even with the tariffs on electric vehicles in place, Chinese automakers have been able to grow rapidly in Europe in 2025 and held over 10% of the market for several months during the second half of the year.
Some automakers are also not waiting for politics. For example, BYD is about to open its factory in Hungary, which is going to get around the tariffs or the possible new minimum pricing system.
Electrek’s Take
This is the logical conclusion to a tariff war that wasn’t really going to help anyone in the long run.
As we’ve stated before, tariffs are rarely the answer when it comes to EV adoption. The goal should be to get as many electric vehicles on the road as possible to displace internal combustion engines. Artificially inflating the price of affordable EVs from China just to protect legacy European automakers, who, frankly, dragged their feet on electrification for way too long, hurts the consumer and the planet.
Also, if they aren’t competing with Chinese EVs in their home market, they are going to become less competitive on the global stage.
A minimum price undertaking is a slightly better compromise. It prevents “dumping” (if you believe that was happening to the extent claimed) but keeps the market open. More importantly, it might encourage Chinese automakers to simply build factories in Europe to avoid this whole mess entirely, something BYD is already doing.
