China’s Chery Delays Plan to Build EVs in Spain on EU Tariffs

[Hamartia Antidote]

China’s Chery Delays Plan to Build EVs in Spain on EU Tariffs

Chery Automobile Co. has pushed back a goal to bring electric-vehicle production to Europe by a year, after the European Union imposed provisional tariffs on EV imports from China.

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A Chery Automobile Co. Omoda E5.

Chery Automobile Co. has pushed back a goal to bring electric-vehicle production to Europe by a year, after the European Union imposed provisional tariffs on EV imports from China.

The Chinese carmaker is now targeting output of its flagship Omoda 5 EV in Spain from October 2025, according to people familiar with the matter. Chery is assessing how the tariffs will affect its plan to bring in partially built cars for final assembly, the people said.

Added EU duties of up to 38% on imported Chinese EVs took effect on a provisional basis in July, but remain subject to negotiation between Brussels and Beijing. The new levies, which add to an existing 10% import fee, are set to be finalized by early November, unless a qualified majority of member states object.

The tariffs have stoked trade tensions and forced automakers in both Europe and China to re-examine their plans to sell more EVs in the region. While Chery, BYD Co. and other Chinese manufacturers are opening plants in Europe to avoid the duties, EU officials have warned that they will be subject to minimum levels of local value creation.

Spain is counting on Chery to reinstate more than 1,000 jobs at the former Nissan Motor Co. facility in Barcelona. Prime Minister Pedro Sanchez broke ranks with the EU by announcing his opposition to the new tariffs during a trip to China this month, where he met with local carmakers including Chery. In a press statement after the meeting, Chery said it would increase its investments in Spain.

In the ongoing talks, Beijing and Brussels are exploring whether an agreement can be reached to control prices and volumes and avert the anti-subsidy tariffs.

EU policymakers are trying to engineer a transition toward cleaner vehicles without damaging the bloc’s all-important auto industry. The challenge is made harder by China’s structural cost advantage on EVs and battery cells.

Chery officials in Spain and China declined to comment on the Omoda 5 delay, which was reported earlier by Tribuna de la Automoción in Spain. A spokesperson for Ebro-EV Motors, its Spanish partner, couldn’t be reached.

The new plan has caused friction with unionized workers who were promised more than 600 full-time jobs in Barcelona starting Oct. 1, with the all-electric Omoda 5 rolling out in the fourth quarter of this year.

Managers at the plant, a joint venture between Chery and Ebro, have informed the union that they can only hire workers part-time because there is less work, a spokesperson for the SIGEN-USOC union told Bloomberg.

In a meeting with management on Wednesday, unions proposed that the workforce be employed full-time in tasks like training or factory refurbishments, the spokesperson said.

Chery announced its partnership with Ebro in April. In the initial plan, Omoda 5 production would be followed by two Ebro-branded sport-utility vehicles. Now, combustion-powered as well as hybrid versions of Omoda 5 have also been delayed, while the factory will launch with the two Ebros on Nov. 18.

The companies have said they plan to produce 150,000 vehicles in Spain by 2029 and re-hire 1,250 workers that were laid off as part of the Nissan factory’s closure four years ago.