Mercedes-Benz Group AG and BMW AG are pressing Berlin to vote against imposing significantly higher European Union tariffs on Chinese-made electric vehicles as German carmakers push to avoid a spat with their most important market.

The European Commission is willing to continue negotiating with China a potential deal to avert tariffs on Chinese electric vehicles even after such tariffs are imposed, a senior EU official said on Monday.

The Commission says registration of China-built EVs rose from 3.5% of the EU market in 2020 to 27.2% in the second quarter of 2024 and Chinese brands from 1.9% to 14.1%. China's spare production capacity of 3 million EVs per year, which needed to be exported, was twice the size of the EU market, it said on Tuesday.

Technical teams from China and the European Commission are actively negotiating a flexible price commitment to mitigate looming EV tariffs.

The European Union and China will continue negotiations to find an alternative solution to tariffs even if member states vote in the coming days to impose levies on electric vehicles, according to people familiar with the matter.

European Union member states are expected to confirm the imposition of punitive tariffs on Chinese-made electric vehicles in a vote on Friday. Frantic efforts by the governments of China and Germany to stop the tariffs are expected to fall short,

Germany remains skeptical about European Union tariffs on imported electric vehicles made in China and is still hoping for a negotiated solution ahead of Friday’s ballot among member states.