VW's SEAT Faces Production Cuts, Layoffs Over EU Tariffs
Volkswagen's Spanish subsidiary SEAT is poised to slash output and lay off approximately 1,500 workers if the EU fails to lower tariffs on its Chinese-made electric vehicles by the end of March.
Since October, the EU has imposed a 20.7% additional tariff on SEAT's CUPRA Tavascan produced in China, raising the total tariff to 30.7%. SEAT CEO Wayne Griffiths claims this has led to missed financial targets and will cost millions by 2025.
"We need a solution within the first quarter," Griffiths stated.
SEAT has engaged with EU officials, while Spanish Prime Minister Pedro Sanchez has urged the EU Commission to intervene. However, Griffiths declined to specify an acceptable tariff level.
Failure to reduce the tariff will force SEAT to discontinue the Tavascan, posing challenges in meeting EU emissions targets. "We can't fix that overnight," Griffiths said. "We may have to reduce combustion engine output and lay off employees."
Tesla, BMW, and Mercedes-Benz have challenged the tariffs in court, but resolutions can take up to 18 months. SEAT may consider legal action but is pressed for time.
"CUPRA is our game-changer," Griffiths said. "If CUPRA is at risk, SEAT is at risk."