Electric vehicles (EVs) . Photo: VCG

Germany's Volkswagen Group and China's SAIC Motor will further expand their presence in the electric vehicle (EV) market, with the two carmakers signing several energy technology cooperation agreements on Thursday.

It comes amid the EU's increasingly protectionist moves against the Chinese EV sector, with planned extra tariffs on Chinese imports. But the collaboration by the two firms offers a vivid example that trade protectionism cannot stop the growing trend of cooperation, experts said.

According to the agreements, both sides will jointly develop three plug-in hybrid models and two pure electric models in China and launch these models as soon as 2026.

"We are strongly pushing ahead our electrification strategy. The course is set. In a dynamic and competitive EV market in China, it is of great importance that we continue to strengthen our strategic partnership with SAIC and drive forward the electrification of SAIC Volkswagen's portfolio," Ralf Brandstätter, chairman and CEO of Volkswagen Group China, said in a statement sent to the Global Times on Friday.

"This trend highlights the increasing collaboration between international car companies and Chinese enterprises to harness the potential of EV technology," Zhang Xiang, director of the Digital Automotive International Cooperation Research Center of the World Digital Economy Forum, told the Global Times on Friday. 

It also serves as evidence that Europe's protectionist measures will not impede this mutually advantageous partnership, Zhang said.

The European Commission announced on June 12 that it would impose an additional provisional duty of between 17.4 percent and 38.1 percent on EVs from China, which has been met with wide criticism.

China and the EU on June 22 agreed to launch consultations on the anti-subsidy investigation into Chinese EVs.

The EU's tariff hike against Chinese EVs was opposed by various industries and some EU members within the block including Germany. 

German Chancellor Olaf Scholz has reportedly proposed equal tariffs for car imports from China and the EU, to intervene in the dispute over electric vehicles with a compromise offer. 

Scholz proposed a deal in which both sides would impose equal tariffs on car imports, with a 15 percent tariff to be under discussion, though the figure could change, the German newspaper Handelsblatt reported on Thursday, citing government and EU sources.

The 15 percent tariff is higher than the current 10 percent tariff on Chinese imported EVs but lower than the planned extra tariffs on EVs from China.

"This proposal definitely indicates that Germany is looking for a solution for both parties. It seems to be about finding a balance, or a compromise," Cui Hongjian, a professor with the Academy of Regional and Global Governance with Beijing Foreign Studies University, told the Global Times on Friday.

From the German perspective, perhaps this investigation should not have been initiated in the first place, and the imposition of such high tariffs on China should have been avoided, Cui said.

After the European Commission announced the provisional duties on EVs from China, a German government spokesman said, "We do not need further trade barriers." Hungary's Ministry of Foreign Affairs and Trade said in a statement that Hungary disagrees with the European move. Volkswagen, BMW, Mercedes-Benz and other major European car makers also spoke out against the duties.

The Chinese business community also firmly opposes the EU's planned tariffs on China's EVs, Zhao Ping, spokesperson for the China Council for the Promotion of International Trade (CCPIT), said on Friday at a press conference. 

Zhao urged the EU to comply with WTO rules and immediately cancel the anti-subsidy investigation into China's EVs.

Observers said the best outcome is that the European Commission scraps its tariff decision before July 4 and abides by WTO rules. 

They urged the EU to look at the facts and consider China-EU economic and trade cooperation rather than being swayed by political factors, especially the US pressure.

China's Ministry of Commerce (MOFCOM) said on Thursday that working teams from China and the European Commission have maintained close communication and have stepped up consultations, regarding the anti-subsidy investigation into Chinese EVs.

"We hope that the EU can work with China in the same direction to push for progress in consultations as soon as possible and reach a solution acceptable to both sides, so as to avoid the escalation of trade friction and a negative impact on China-EU economic and trade relations," He Yadong, a spokesperson for MOFCOM, said on Thursday.