Brussels and Seat reach an agreement to avoid EU tariffs on the Cupra Tavascan

BrusselsFirst agreement between Brussels and an automotive company to circumvent tariffs on electric cars manufactured in China. The European Commission announced on Tuesday that it has reached an agreement with the Volkswagen Group to remove the 20.7% tariffs previously applied to the Cupra Tavascan model. These customs duties dealt a severe blow to Seat, and the profits of the Catalan-based company plummeted by more than 90% last year. As a result, Cupra Tavascan cars—designed in Catalonia but manufactured at the Chinese plant in Anhui—can now be imported throughout the European Union without tariffs. However, the import volumes and agreed minimum prices have not been made public for confidentiality reasons.

Seat Cupra already warned in October 2024, when the EU implemented the tariff increase against China, that it was negotiating with the Spanish government and the European Commission to try to lower customs duties. In fact, it has always been optimistic that they would reach an agreement with the European authorities, who have jurisdiction over foreign trade. One of its main arguments is that it is a car that was designed entirely in Spain and is manufactured on a European Volkswagen Group platform, and that all the business plans were made when there were no tariffs, duties that were introduced after the car went on sale.

For this reason, the European Commission stated in a press release issued this Tuesday that the "investigation" carried out by the EU authorities themselves has "demonstrated" that the minimum price set by Volkswagen's Chinese subsidiary for this specific model "will not be detrimental" to the European Union's industry. In this regard, the Commission emphasizes that, in addition to committing to selling at a minimum price, Volkswagen has agreed to "limit its import volumes" and "invest" in electric vehicle projects within the European Union. "It will support the EU's industrial strategy and incentivize compliance with the EU's climate objectives," the Commission's statement asserts. In fact, Seat has already invested in electrification and will launch the Cupra Raval, a 100% electric vehicle designed in Catalonia and manufactured in Martorell, this quarter. where an investment of 300 million euros has also been made in a battery assembly plantAt the Baix Llobregat plant, another 100% electric car, the Volkswagen ID. Polo, will also be manufactured this year. It's worth remembering that the European Union's tariffs on the Asian giant have severely impacted the Tavascan Cupra model and have already affected Seat's results. Although sales continued to grow in 2025, both profitability and profits plummeted, according to data released by the Martorell-based automotive company. Sales increased by 4.1 percent in the first nine months of the year compared to the previous year, reaching 439,500 vehicles, and the company's revenue grew by 6.9 percent to 11.2 billion euros. However, the company's operating profit plummeted by 96.2 percent, falling to just 16 million euros. Furthermore, the return on sales remained at a meager 0.1%, 3.8 percentage points lower than in the same period of the previous year.