Mercedes-Benz CEO Urges EU-China EV Trade Compromise Amid Tariff Tensions

Mercedes-Benz CEO Ola Källenius is calling on the European Union and China to reach an "equitable solution" over the escalating electric vehicle (EV) trade dispute. Speaking at the Shanghai auto show, Källenius warned that steep tariffs are a blunt tool that could stifle innovation and damage open markets. He emphasized the importance of a level playing field, urging both sides to pursue win-win strategies rather than protectionist barriers.

In October, the EU raised tariffs on China-made EVs to as high as 45.3%, including additional duties on brands like BYD (17.0%), Geely (18.8%), and SAIC (35.3%), atop the 10% standard EU car import tariff. These moves triggered retaliatory trade measures from Beijing, affecting European exports such as French cognac. Negotiations are ongoing, with discussions around alternatives like “price undertakings” that could replace the tariffs with minimum price guarantees.

Källenius noted that historically, economies exposed to open competition have been the most innovative. He reaffirmed Mercedes-Benz’s commitment to the Chinese market, despite recent struggles with falling sales due to local competition and weakened consumer confidence. The automaker recently unveiled its "Vision V" luxury all-electric van series in Shanghai, with some models to be produced in China.

Looking ahead, Källenius expects growth in the high-end EV market over the next two to three years. He also projected that plug-in hybrids will remain relevant alongside fully electric vehicles at least until 2030.

With trade tensions rising globally—amid similar disputes involving the U.S. under President Donald Trump—automakers like Mercedes-Benz are urging diplomacy to preserve global cooperation in the EV industry.