Volkswagen-owned Seat Group has warned that the impact of the European Union’s new import tariffs on Chinese-built EVs may force it to stop production of the Ibiza and Arona and “start firing people” in an attempt to claw back heavy losses and balance its sales mix.
The Spanish car maker currently builds its £47,000 Tavascan SUV in China and has been absorbing the additional 20.7% import tax (on top of the previous 10%) imposed by the EU since October 2024.
The tariffs were brought in to combat government-subsidised Chinese brands undercutting European car makers.
However, speaking to Autocar, CEO Wayne Griffiths said the tariffs “do not protect Europe or Spain” and are instead “going to damage us”, referencing the effect they have on the firm’s ability to hit increasingly stringent emissions targets.
He warned the financial consequences in terms of lost sales and costly fines could result in Seat having to reduce its workforce and ICE car line-up.
Griffiths said: “This puts us potentially in a position where we will have to start firing people. We’re paying the tariff at the moment instead of the customer and we can’t continue doing that.”
If tariffs are not removed, “we will have to stop building the Seat Ibiza and Arona” and “reduce combustion car [production]” to balance the company’s sales mix.
Griffiths didn’t confirm whether a stoppage would be permanent or temporary. In December 2024, Seat committed to significantly updating the Ibiza and Arona later this year and offering them with hybrid power.
This threat is being heard by European legislators, said Griffiths. “That’s an impact they understand. So there’s a willingness of understanding from them,” he said.
“Now we try to find a solution in a complicated legislation framework, because this thing affects everybody and all manufacturers. So that’s what we’re struggling with at the moment. And there are different mechanisms that you can use to try and get to a better solution.”
He referenced Tesla, which managed to bring tariffs down on its China-made EV to 7.8%.
“We’re looking at all options together with the European Commission,” said Griffiths. “And the good thing is we have the support of the Spanish government to find a solution.”