The European Commission has set out the conditions under which Chinese electric-vehicle manufacturers can seek to replace EU countervailing duties with “minimum import price” commitments, tightening the framework for any deal intended to address subsidy concerns without relying solely on tariffs.
In guidance issued on 12 January 2026, the Commission said Chinese exporters may submit “price undertaking” offers in the context of the EU’s anti-subsidy measures on battery electric vehicles (BEVs) from China. The document, according to the Commission, is meant to standardise what information exporters should provide, including the proposed minimum import price, sales channels, safeguards against cross-subsidisation through other vehicle lines, and plans for future investment in the EU.
The move is the latest step in a dispute that began with the EU’s anti-subsidy investigation launched in 2023 and culminated in definitive countervailing duties adopted in late 2024. Under the measures, additional duties (on top of the EU’s standard 10 per cent car import tariff) were set at 17.0 per cent for BYD, 18.8 per cent for Geely, and 35.3 per cent for SAIC, with a 20.7 per cent rate for other cooperating companies and 7.8 per cent for Tesla following an individual examination request. The duties apply for five years.
Price undertakings are a recognised feature of EU trade-defence practice, allowing exporters to commit to pricing that removes the identified injury to EU industry. The Commission’s new guidance signals that, for Chinese EVs, such undertakings will be assessed against a high threshold. Reuters reported that the Commission’s criteria require any minimum price offer to eliminate the injurious effects of subsidies, deliver an effect equivalent to the duties, be practicable to operate, and minimise the risk of “cross-compensation” — for example, offsetting compliance in one area through the sale of other vehicles. Reuters also reported that the Commission said it would take additional factors into account, including investments made in the EU.
The Commission’s focus on cross-compensation and practicability reflects the operational challenge of policing undertakings in a sector with complex product ranges, frequent model updates and multiple commercial pathways. Enforcement would require confidence that the declared minimum prices are not circumvented through rebates, bundled services, financing structures, dealer incentives, after-sales packages, or shifting value between different vehicle categories. The Commission’s press notice accompanying the guidance stressed that each offer would be examined under the same legal criteria and assessed objectively, on a non-discriminatory basis, consistent with WTO rules.
Beijing has pushed for a negotiated outcome. On the same day, China’s commerce ministry said China and the EU had agreed on steps to ease the dispute and welcomed the EU’s move to set out guidelines for minimum pricing, though the ministry’s statements did not imply that the EU duties had been lifted. The Associated Press reported that the EU guidance includes minimum import price elements designed to reflect differences between vehicles, and that EU officials would review manufacturers’ offers under WTO-aligned standards.
The Commission has already been testing the approach in individual cases. In December 2025 it confirmed it was reviewing a proposal from Volkswagen Anhui covering EVs built in China, after the company sought to replace the 20.7 per cent duty on its imports with a mechanism combining an annual import quota and a minimum import price. Reuters reported that the Commission said it would assess whether the proposal was acceptable and practical.
The Commission’s reference to investment as a factor is likely to be closely watched in member states seeking industrial activity linked to the EV transition. Chinese groups are expanding manufacturing footprints in Europe, particularly in battery supply chains. Reuters reported in 2025 that battery maker CATL expects production at its Debrecen plant in Hungary to start by early 2026, describing it as a €7.3 billion project aimed at supplying European carmakers.
The broader trade relationship has continued to deteriorate alongside the EV file. China has pursued investigations and duties affecting EU exports in other sectors. China imposed provisional duties on certain EU dairy products, with the measures widely seen in markets as linked to the EV tariff dispute. China also imposed anti-dumping duties on EU pork imports for five years, after an investigation it said found below-cost sales.
For Chinese EV makers, the Commission’s guidance clarifies that a minimum price offer must do more than raise sticker prices. It must neutralise the effect of subsidies as measured by the EU investigation, be administratively workable, and be enforceable across sales structures. For the EU, the guidance is designed to preserve the legal and economic effect of the 2024 duties while keeping open a negotiated route that could, in principle, remove tariffs for exporters that meet the conditions.
Next steps will depend on whether exporters submit undertakings that satisfy the Commission’s tests and whether the Commission can design monitoring arrangements robust enough to withstand both market incentives to circumvent and the legal scrutiny that accompanies trade-defence settlements. Any approved undertaking would be exporter-specific, and the duties would otherwise remain in place.
