Stay informed with free updates
Simply sign up to the Automobiles myFT Digest — delivered directly to your inbox.
Mercedes-Benz’s chief executive has warned of the effects of a wave of tariffs and trade barriers as he pointed to the highest “complexity” the global automotive industry has faced in more than three decades.
Ola Källenius, head of the German carmaker, said the transition to electric vehicles alongside shifts in geopolitics and trade had fundamentally challenged his industry, saying regionalisation would remain a trend.
“I don’t think I’ve experienced a higher level of complexity in my 32 years in the business,” he told reporters gathered at Shanghai’s closely watched auto show.
The comments came as global carmakers have been forced to contend with higher EU tariffs on electric vehicles imported from China, as well as President Donald Trump’s looming 25 per cent tariffs on car exports to the US.
Källenius said his company was still committed to the US — where it sold 14 per cent of its cars last year — in the “long-term” and also reiterated calls for the EU to reach an agreement with Beijing over EV tariffs.
Mercedes and other German carmakers have repeatedly hit out at EU tariffs on Chinese-made electric vehicles, which can reach up to 45 per cent. They fear their exports to China could suffer from retaliation by Beijing, and they also ship EVs from China to Europe themselves.
Källenius on Wednesday reiterated hopes that an “equitable and intelligent solution” would be found in continuing discussions between Brussels and Beijing.
That dispute has since been overshadowed by Trump’s trade war with China, which has snarled global trade after tariffs between the world’s two biggest economies this month spiralled to more than 100 per cent.
“We’re also dependent on the ability to import and export in all directions — if restrictions, tariffs, other trade barriers arise, that is not good for general global trade and would affect us as well,” he said. Källenius was among a group of automotive executives who met Trump last week to discuss tariffs.
Audi chief executive Gernot Döllner also hit out at restrictions as he spoke on the sidelines of China’s biggest car show, where global automakers have descended with new models in a market where sales have drastically slumped amid fierce competition from Chinese players.
“Tariffs are not the solution,” he said in an interview with the Financial Times. “They hinder innovation and they make a false competition,” he added. “We are producing in China for over 30 years now and we believe other solutions have to be found.”
“We see a discussion in the US and hope that we have stability there in the next month,” he added.
The Shanghai auto show alerted the world to the rapid development of Chinese EV technology when it was last held in the city in 2023. Tariffs on Chinese vehicles were imposed by the US and the EU in 2024 as automakers, including BYD, expanded overseas.
But that industry-specific dispute has since been overshadowed by the trade war between the US and China, which now threatens the future of the overall flow of goods between the two countries.
“No matter what the current political policymaking is, [the US] is an economy and market you want to have a very good presence in,” Källenius said.
He described China as “the most competitively intense market”.
“I can only repeat what history tells us: economies that are free and open and are exposed to the full force of competition are usually the ones that are most innovative,” he added. “We are open for competition in any direction through any country on a level playing field.”
