Volkswagen's CUPRA Faces Crisis: Massive Tariff Threatens Electric SUV Tavascan's Future

Author: Nabaparna Bhattacharya | September 04, 2024 01:23pm

An electric vehicle manufactured in China and designed in Spain by Volkswagen AG’s (OTC:VWAGY) CUPRA  brand would be reportedly “wiped out” if the European Commission implemented import tariffs of 21.3% on the vehicle.

Wayne Griffiths, CEO of SEAT and CUPRA under Volkswagen’s SEAT S.A. subsidiary, stated that raising the price of the Tavascan, an all-electric SUV priced at around 52,000 euros ($57,500), to offset costs was not feasible given the current European economic conditions, reported Reuters.

Moving production to another site was also not viable after the company had already invested in expanding capacity at Volkswagen’s Anhui plant, a majority-owned joint venture with China’s JAC Automobile Group, Reuters added.

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

In fact, without the anticipated sales of the Tavascan, CUPRA would fall short of the EU’s carbon dioxide reduction targets for the coming year, risking substantial fines.

The report added that this could lead to reduced production and potential job cuts at its base in Spain.

The report highlighted that these comments represent the strongest reaction from a carmaker affected by the tariffs, underscoring concerns that Brussels’ investigation into Chinese subsidies could inadvertently harm the very domestic manufacturers it aims to protect.

Photo by multitel on Shutterstock

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