Lynk & Co commits to competitive pricing despite looming EU tariffs on Chinese EVs
Lynk & Co commits to competitive pricing despite
Chinese-Swedish automaker Lynk & Co has declared its intention to absorb the cost of potential tariffs on its upcoming battery-electric car rather than passing them on to consumers. This announcement comes as the European Union contemplates imposing significant tariffs on Chinese-made EVs, a move that could reshape the landscape of the continent's rapidly evolving automotive sector.
Nicolas Appelgren, Lynk & Co's CEO for Europe, made this striking commitment during an interview at the Automechanika automotive trade fair in Frankfurt. "We cannot - a lot of the competitors are produced in Europe ... we need to price the car correctly in the market and work from there," Appelgren stated, highlighting the brand's determination to remain competitive in a market dominated by established European manufacturers.
The automaker, co-owned by China's Zhejiang Geely Holding Group and Sweden's Volvo Cars, is set to launch its first China-made battery-electric car in Europe next month. Under current proposals by the European Commission, this compact SUV would be subject to an 18.8% tariff, part of a broader initiative to counter what the EU perceives as unfair subsidies for EV makers producing in China.
Despite this potential financial hurdle, Lynk & Co has not yet disclosed the price for its new electric SUV. The vehicle, based on the same platform as Volvo's EX30 and Zeekr's X, is expected to compete in the 40,000 to 45,000 euro price range in Germany, aligning with its platform siblings.
Appelgren's stance on pricing strategy presents a stark contrast to other automakers facing similar challenges. For instance, Wayne Griffiths, CEO of SEAT/CUPRA brands, has expressed grave concerns about the impact of a 21.3% tariff on the CUPRA Tavascan EV, also manufactured in China. Griffiths warned that such a tariff could jeopardise the company's financial future and its ability to meet EU-mandated carbon dioxide reduction targets.
The differing perspectives highlight the complex challenges facing automakers as they navigate the transition to electric mobility amidst evolving regulatory landscapes. While CUPRA, a brand under Volkswagen's Spanish subsidiary SEAT S.A., faces potential fines due to its mix of combustion engine and electric vehicle sales, Lynk & Co's all-electric lineup provides it with greater flexibility in managing regulatory compliance.
Looking ahead, Lynk & Co is already planning for a future where European production becomes increasingly crucial. Appelgren revealed that the brand's next battery-electric car released in the region will be manufactured in Europe, with Geely actively scouting locations for a new plant. This strategic move could help the company sidestep future tariffs and align more closely with EU production incentives.
In the meantime, Lynk & Co is rapidly expanding its European presence. The brand currently sells and rents its first European model, a hybrid SUV, in seven markets across the continent. Appelgren disclosed that negotiations are underway with retailers throughout the region to feature Lynk & Co vehicles in showrooms by the end of this year, signalling an aggressive push for market share.
The company's growth strategy extends beyond individual consumers. Lynk & Co plans to launch another plug-in hybrid next year and is setting its sights on fleet buyers, who constitute a majority of EV purchases in Europe. This multi-pronged approach demonstrates the brand's commitment to establishing a strong foothold in the competitive European automotive market.