The Biggest Victim Of Europe's Anti-China EV Tariffs: The Mini Cooper

The European Union has thrown its hat in the China trade war gauntlet, but it’s not clear if this will play out exactly in Europe's favor. According to a report from Reuters, BMW, of all automakers, stands to be one of the hardest-hit brands by the EU’s anti-China tariffs. This is due to BMW's use of Chinese production and joint ventures for some of its models, including ones sold in Europe.

BMW's Mini brand looks to be the brand taking it most on the nose with the new Great Wall Motors-produced electric Mini Cooper SE facing a new 38.1% tariff. That's on top of the 10% import tariff the EU already imposes on electric vehicles. With numbers like these, it is easy to understand why BMW’s CEO Oliver Zipse described tariffs as the “wrong way to go,” last week. 

Now, it should be noted that not all China-import BMW vehicles are going to be subject to the full 38.1% tariff. BMW uses several joint-venture companies to produce China-market vehicles. The not-sold-in-America BMW iX3 and China-only BMW i3 sedan (an electric 3 series, not the i3 you may be thinking of) are two models made in Shenyang by the automaker Brilliance. The iX3 is exported out to Europe and beyond from the Shenyang plant. 

But these new tariff rules don’t discriminate against the automakers themselves or if they’re simply parts of joint ventures. The BMW-Brilliance joint venture, as well as the latest team-up with Great Wall Motors, are subject to different tariff rates. Because Brilliance played ball with the EU’s investigation, it will be subject to a lower rate between 17.4 and 21%. Great Wall Motors allegedly didn’t, so it’s subject to the maximum 38.1% tariff.

That’s not great news for the Mini Cooper SE, or its five-door counterpart, the Aceman, which will also be made at the same joint venture plant in China. United Kingdom production won't happen for either until 2026. Mini has put a lot of energy into making it more competitive and affordable this time around; contributor Tim Stevens drove one recently and enjoyed the experience. It’s a solid lower-cost option that would start right at the €35,000 mark, slightly above Chinese cars like the BYD Dolphin or MG 4.

This 38.1% tariff could add more than 13,000 EUR to the price of the Mini—making it wildly uncompetitive and very unattractive to the budget buyers it originally was marketed toward.

It just seems like the whole world has it in for Mini, and in turn, the whole concept of a small cheap EV. Initially, the latest electric Mini seemed to be a surefire addition to the U.S. market, but the Biden Administration’s 100% Chinese EV tariff no doubt had Mini rethinking its plans. (The same is happening at Volvo right now with the EX30 as well.)

Similarly, these EU tariffs will likely send Mini back to the drawing board, or at least make BMW CEO Oliver Zipse negotiate more intimately with the EU. Other brands may now end up thinking twice when it comes to synergizing and shipping over lower-cost Chinese models to markets in Europe or the U.S. And it’s not even clear if these tariffs will even work to slow down the onslaught of Chinese products.

There’s speculation that BYD’s prices on its Dolphin and Seal models will likely stay the same since they already sell for about double the price in Europe compared to China. A recent study showed that BYD makes a whopping €14,500 of profit on Seal U crossover sold in Europe. Out of all the brands queried, BYD walked away with the lowest tariff penalty. 

Either way, it's quite ironic that one of Europe's own automakers is going to suffer the most from tariffs aimed at protecting the European car market.