Seat says negotiations with the EC over tariffs on the Cupra Tavascan are in the "final stretch."

"There are unique cases that require unique solutions. We need stability," said the President of the Generalitat of Catalonia, Salvador Illa, during a visit to the Seat-Cupra factory in the Chinese city of Hefei. In this way, the president has pressed the negotiations the automotive company is holding with the European Commission, which has seen how the 20.7% tax imposed by Europe—which is in addition to the general 10% tax—has ruined the profitability prospects of the Tavascan model, a 100% electric vehicle.

Seat-Cupra's interim CEO, Markus Haupt, who traveled to Hefei to participate in Illa's visit to the factory where the vehicle is manufactured, stated that the "negotiations are in the final stretch" and expressed his gratitude for the "constant support of President Illa and President Pedro Sánchez" in their relations with the European Commission.

In this regard, he explained that the public-private dialogue between the car company and the Generalitat and the Catalan government are helping to unblock these negotiations. Therefore, Illa emphasized that although the Tavascan model is manufactured in China, its design and development are carried out in Martorell, and next year, the Cupra Raval, the brand's next electric model, will begin production at the Catalan factory.

Company sources have stated that if there is no agreement with the European Commission regarding these tariffs, production of the Tavascan is in a "crippling situation." Currently, the car is loss-making due to the tariffs and the costly investment the company has made. According to the latest results presented by Seat this week, the carmaker has seen its first-quarter profits cut by 90% due to this reason.

Illa stated that when Volkswagen decided to manufacture the Tavascan model in Hefei, the global economic context was different. Therefore, "he asserted that it is necessary to establish a stable framework for the economy." Along these lines, he reiterated that the Tavascan model is European and affirmed that both the Government and the Generalitat are working to resolve the situation.

Seat's interim CEO expressed his gratitude for the support, while asserting that the talks with the EU are "in-depth" and aim to reach an agreement soon and reverse "the negative impact" this is having on the company's bottom line.

The Volkswagen factory in Hefei

In Hefei, the Volkswagen Group has built a 574,000-square-meter factory, which will employ around 3,000 people by the end of the year. The maximum production capacity is 1,200 cars per day. The factory is 96% automated and uses 1,200 robots to help assemble parts and manufacture vehicles from start to finish. The first vehicle to roll out of this automotive plant is expected in 2023.