Impact of Trade Tariffs on Volkswagen

Investments
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  • Volkswagen’s CUPRA Tavascan which will be build in China and shipped to Europe is set to receive a 21.3% tariff from the EU Commission, sources familiar with the matter said.
  • CUPRA Tavascan was part of those vehicles previously subjected to 37.6% tariff.
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This topic discusses how the trade tariffs imposed by the EU Commission on EVs imported from China will affect Volkswagen.

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CUPRA risks missing the 2025 CO2 targets due to additional tariffs on Tavascan, CUPRA CEO says

  • Wayne Griffiths head of SEAT and CUPRA brands has warned that raising the tariffs on the Tavascan model priced at 52,000 euros and build at Volkswagen’s jointly-owned Anhui plant is not an option at the current environment.

  • He pointed out that CUPRA risks missing hitting its CO2 targets for 2025 due to the tariffs imposed on the model.

    “It puts the whole financial future of the company at risk,” Griffiths said. “The intention was to protect the European car industry but for us, it’s having the opposite effect … We need to find a solution.”

  • Annual sales of 70,000 CUPRA Tavascan is targeted.

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  • CEO Oliver Blume says tariffs imposed on Chinese EVs by the EU could impact Volkswagen vehicles manufactured in China as well as German exports by Audi, Porsche and Lamborghini.
  • He wants companies that invest and create jobs in Europe to receive benefits such as tax exemptions.

https://europe.autonews.com/automakers/eus-china-ev-tariffs-vw-ceo-oliver-blume-suggests-way-out

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SEAT warned the tariff is costing the company hundreds of million of euros

  • SEAT warned that it could lose hundreds of million of euros in 2025 due to the EU tariff on Cupra Tavascan.
  • The Volkswagen subsidiary said the tariff caused it to lose its financial targets in 2024.
  • Launched in 2024 and produced in China, Cupra Tavascan costs between 50,000 to 60,000 euros and 70,000 units was targeted to be delivered to customers per year.

https://www.reuters.com/business/autos-transportation/vws-seat-boss-warns-spanish-jobs-risk-if-china-made-ev-tariff-is-not-lowered-2025-02-07/

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  • Trump said he will impose around 25% tariff on autos by April 2.

  • He said that the tariffs are working and that he had been contacted by companies wanting to come back to the US.

    “I’ve been contacted by some of the biggest companies in the world, and because of what we’re doing economically and through tariffs and incentives, they want to come back into the United States,” he said.

  • Volkswagen shares shed 2.6% as a result.

  • CEO Oliver Blume recently said that he’s seeking direct contact with Trump, hoping to gain tariff advantages due to their investments in the country.

Assessment
Given Trump’s decision to suspend the 25% tariff on Mexico and Canada imports after getting assurances from both countries to stop Fentanyl and illegal migration, it seems to me that Trump is using the tariff as a negotiation tool to get what he wants.

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