On February 10 local time, a statement from the European Commission marked a turning point in the China–EU electric vehicle trade dispute: Volkswagen's price commitments for pure electric vehicle exports were formally accepted, and the CUPRA Tavascan model produced by Volkswagen (Anhui) Co., Ltd. will be exempted from a 20.7% anti-subsidy duty when exported to the EU.

This is the first individual company exemption approved since the EU's final ruling in its anti-subsidy investigation into Chinese electric vehicles. Through the Volkswagen Anhui case we can see not only one company breaking through, but also that China and the EU can shift from being trade rivals to achieving mutual benefit. It is also a new contribution from Anhui—the country's newly emerged top auto-producing province—to promote China–EU automotive industry cooperation.

Volkswagen Anhui is Volkswagen Group's joint venture in China, with the German side holding a 75% stake, and it is Volkswagen's only majority-owned vehicle joint venture in China. Backed by entities such as Volkswagen (Anhui) Co., Ltd., Volkswagen (China) Technology Co., Ltd., Volkswagen (Anhui) Components Co., Ltd., and Volkswagen (Anhui) Digital Sales and Service Co., Ltd., Volkswagen aims to build a global center for new-energy vehicle R&D, innovation, and components procurement in Hefei. The scale of the effort has led outsiders to suggest Volkswagen is effectively creating another headquarters in Hefei.

The CUPRA Tavascan is the first model produced by Volkswagen Anhui; it was designed and developed in Europe and manufactured in China, making it a typical example of deep integration in the China–Europe automotive supply chain. It is therefore not hard to understand why it became the first to receive the EU's approval.

In recent years, as China's new-energy vehicle industry has achieved great success, the EU has grown increasingly anxious in this field—worried both that Chinese electric vehicles will undercut European manufacturers through cost advantages and that European automakers will shift many parts of the supply chain to China.

The Volkswagen Anhui case offers one possible solution to the EU's concerns. According to the European Commission's announcement, Volkswagen's commitments include three elements: selling in the EU at no lower than the agreed minimum import price, limiting export volumes to the EU, and investing in a series of significant projects in the EU related to pure electric vehicles. This case indicates that deep industrial integration can undoubtedly help achieve breakthroughs under new trade rules and ease trade barriers.

This development is a "warm sign" that the China–EU automotive economic and trade contest is easing, and it also exemplifies how multinational automakers are seeking a "greatest common denominator" amid headwinds against globalization. On February 12, Ministry of Commerce spokesman He Yadong responded that the China–EU automotive industries are "deeply integrated and mutually beneficial," and he expressed the hope that more Chinese companies will reach agreement with the EU on price commitments.

For the China–EU automotive industry, this is a new beginning.