One of the most popular car brands in Europe could have to cut 1,500 jobs amid fears tariffs on electric vehicles from China could impact the brand.
Seat, which is owned by Volkswagen, has warned it may have to cut output and lay off 1,500 workers if the European Union does not lower its tariffs on China.
The EU has levied additional tariffs on Chinese companies since October last year in a bid to cut down on companies benefitting from unfair market conditions.
One of the world’s most successful companies, BYD, has a duty of 17 per cent, while Geely (18.8 per cent), SAIC (35.3 per cent) and Tesla (7.8 per cent) also face tariffs.
Do you have a story you’d like to share? Get in touch by emailingmotoring@gbnews.uk
The Cupra Tavascan is slapped with tariffs since they are manufactured in China
CUPRA
Companies which did not cooperate with the EU will face a duty of 35.3 per cent, while those who did cooperate, including Seat, are subject to a duty of 20.7 per cent.
Seat, which also makes cars under the Cupra brand, pays the additional 20.7 per cent charge on top of an existing 10 per cent tariff on the Cupra Tavascan produced at the VW plant in Anhui, China.
While the tariffs aim to protect established European brands, some automotive executives have warned that they could do the opposite and lead to issues with domestic industry.
Wayne Griffiths, CEO of Seat, told Reuters that the tariffs on a car that costs between £40,000 and £50,000 caused the brand to miss its financial targets last year and could cost them “hundreds of millions of euros in 2025”.
He added: “We don’t have much time. We need to get to a solution within the first quarter.”
Unless the additional tariff is not reduced or removed in the first quarter, Seat will be forced to cut the loss-making Tavascan vehicle from its line-up.
While Griffiths didn’t say what tariff the carmaker could afford, he suggested it needed to be “as close as possible” to the original 10 per cent rate.
Manufacturers are able to buy carbon credits from other brands or cut production of petrol and diesel vehicles to lower their average emissions to meet EU targets.
So far, Seat has avoided doing so, as it aims to increase its output of electric vehicles. While legal action is on the table, Griffiths said the brand could not afford to wait.
He added: “We can’t fix that overnight. So what do you do? Reduce combustion engine output and start firing people. That’s what’s going to happen if we can’t get a fix.
“Cupra is our game-changer – it’s what made us profitable as a company. If Cupra is at risk, Seat is at risk.”
Data from the Society of Motor Manufacturers and Traders (SMMT) shows that Seat has sold 1,929 vehicles in the UK so far this year, worth 1.38 per cent of the total market share.
LATEST DEVELOPMENTS:
Seat and Cupra registered 67,180 vehicles in the UK last year
SEAT|CUPRA
While this sees the brand outsell competitors like Suzuki, Tesla and Honda, new registrations of vehicles dropped almost 30 per cent compared to the same time last year.
In 2024, Seat and Cupra registered 67,180 vehicles, marking a 16.2 per cent increase from the previous year, outpacing the overall market growth of 2.6 per cent.
