BMW’s joint venture with China’s Great Wall Motors leads to unexpected pricing issues for the new electric Mini.
June 14, 2024 has 3:33pm ET
The European Union has waded into the trade war with China, but it is unclear whether this will exactly work in Europe’s favor. According to a report from Reuters, BMW, among all automakers, is one of the brands hardest hit by the EU’s anti-China tariffs. This is due to BMW’s reliance on Chinese production and joint ventures for some of its models, including those sold in Europe.
BMW’s Mini brand appears to be the one taking the biggest hit with the new electric Mini Cooper SE produced by Great Wall Motors, facing a new tariff of 38.1%. This is on top of the 10% import duties the EU already imposes on electric vehicles. With numbers like those, it’s easy to see why BMW CEO Oliver Zipse last week called tariffs the “wrong way forward.”
The European Union’s new tariff rules are no joke
Imported electric vehicles were already subject to 10% tariffs, but a new investigation designed to combat unfair subsidies has imposed new tariffs on electric vehicles imported from China. Brands that cooperated with the EU got tariffs ranging from 17.4% to 21%, while brands that didn’t got a maximum of 38.1% added. This affects all electric vehicles imported from China, including those from Tesla, BMW, etc.
Gallery: 2025 Mini Cooper SE First Drive
37 Pictures
It should now be noted that not all BMW vehicles imported into China will be subject to the full 38.1% tariff. BMW uses several joint ventures to produce vehicles for the Chinese market. The BMW iX3, not sold in America, and the China-only BMW i3 sedan (an electric 3 Series, not the i3 you may be thinking of) are two models made in Shenyang by automaker Brilliance. The iX3 is exported to Europe and beyond from the Shenyang factory.
But these new pricing rules do not discriminate against automakers themselves or if they are simply part of joint ventures. The BMW-Brilliance joint venture, as well as the latest collaboration with Great Wall Motors, are subject to different duty rates. Because Brilliance played along with the EU investigation, it will be subject to a lower rate of between 17.4% and 21%. Great Wall Motors would not have done so, so it is subject to the maximum tariff of 38.1%.
This isn’t good news for the Mini Cooper SE, nor its five-door counterpart, the Aceman, which will also be made at the same joint venture factory in China. Production in the UK won’t happen until 2026. Mini has put a lot of energy into making it more competitive and affordable this time around; Contributor Tim Stevens drove one recently and enjoyed the experience. This is a solid, less expensive option that would start from €35,000, slightly above Chinese cars like the BYD Dolphin or MG 4.
This 38.1% tariff could add more than EUR 13,000 to the price of the Mini, making it extremely uncompetitive and very unattractive to the budget buyers it was originally intended for.
It seems the whole world is interested in Mini and, therefore, the whole concept of a small, inexpensive electric vehicle. Initially, the latest electric Mini seemed like a surefire addition to the U.S. market, but the Biden administration’s all-Chinese EV tariff has undoubtedly caused Mini to rethink its plans. (The same thing is currently happening at Volvo with the EX30.)
Likewise, these European tariffs will likely bring Mini back to the drawing board, or at least force BMW CEO Oliver Zipse to negotiate more intimately with the EU. Other brands might now think twice when it comes to creating synergies and shipping lower-cost Chinese models to markets in Europe or the United States. And it’s not even clear whether these tariffs will help slow the onslaught of Chinese goods.
There is speculation that BYD’s pricing on its Dolphin and Seal models will likely remain the same since they already sell for around double the price in Europe compared to China. A recent study showed that BYD makes a huge profit of €14,500 on the Seal U crossover sold in Europe. Of all the brands surveyed, BYD came away with the lowest price penalty.
Regardless, it is quite ironic that one of the European car manufacturers is the one that will suffer the most from the tariffs aimed at protecting the European car market.
Contact the author: kevin.williams@insideevs.com
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