Germany urges compromise in EU-China EV row

The German government on Wednesday urged the European Union and China to reach a compromise a day after Brussels announced extra tariffs on Chinese-made electric cars.

Europe's biggest economy, whose flagship auto industry is mired in problems, is "appealing both to Brussels and Beijing to come to durable and constructive solutions" through ongoing talks, said Chancellor Olaf Scholz's spokesman Steffen Hebestreit.

Germany had voted against the extra tariffs, measures which Hebestreit said "will naturally bring a response from the Chinese side".

"Such trade disputes are not something we should aspire too," he told a press conference.

The new tariffs of up to 35 per cent were announced by the European Commission on Tuesday after an EU probe found Chinese state subsidies were undercutting European automakers.

Beijing said Wednesday it had lodged a complaint with the World Trade Organization, with China's commerce ministry vowing to "take all necessary measures to firmly protect the legitimate rights and interests of Chinese companies".

Talks are continuing between the EU and China, and the duties can be lifted if the two sides reach a satisfactory agreement.

Suggested watch: Volkswagen Virtus hits 50,000 sales in India but what makes it so popular?

On Tuesday Germany's Association of the Automotive Industry, which represents car giants like Volkswagen, BMW and Mercedes, branded the tariffs "a step backwards for free global trade and thus for prosperity, job preservation and growth in Europe".

On Wednesday Volkswagen warned that "painful" cuts lay ahead as it announced plummeting third-quarter profit, in part because of falling sales in China, its biggest market.

Worker representatives this week said at least three German VW plants were at risk and tens of thousands of jobs could go at the namesake brand.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.