BRUSSELS, June 10 (Reuters) - The European Commission is

this week expected to disclose the tariffs it plans to impose on

Chinese electric vehicles (EVs) due to what it says are

excessive subsidies, a move likely to prompt stern words and

possible retaliation from Beijing.

Less than a month after Washington quadrupled duties for

Chinese EVs to 100%, Brussels will set almost certainly far

lower tariffs for imports from Chinese makers such as BYD

and Geely as well as western producers

such as Tesla that export cars from China to Europe.

The move comes as European automakers are being challenged

by an influx of lower-cost EVs from Chinese rivals. Still, there

is virtually no support for tariffs from the continent's auto

industry.

German automakers in particular are heavily dependent on

sales in China - and thus fear retribution from Beijing - and

European auto firms also import their own Chinese-made vehicles.

But European Commission President Ursula von der Leyen has

repeatedly said Europe needs to act to prevent China from

flooding the bloc's market with subsidised EVs.

"If provoked, the reaction and repercussions could lead to a

trade war which would be devastating for a region that is still

heavily dependent on Chinese dominated supply chains in order to

achieve its lofty climate goals," said Will Roberts, head of

automotive research at Rho Motion.

China has rebuked the EU over the anti-subsidy

investigation, urged cooperation and lobbied individual EU

countries, but not fully spelt out what its response to tariffs

would be.

Beijing has already launched an anti-dumping investigation

into mostly French-made imports of brandy. It also passed a

law in April to strengthen its ability to hit back should the

United States or EU impose tariffs on exports of the world's No.

2 economy.

The EU's pre-disclosure notice comes a few weeks before the

July 4 deadline for imposing provisional measures. They could

though apply retroactively for the prior 90 days.

Interested parties will be given three working days to

comment on the accuracy of the Commission's calculations.

The investigation will continue until late October, when a

decision on whether to impose definitive duties, typically for

five years, will be taken. Proposed duties would apply unless EU

governments overwhelmingly oppose them.

That leaves time for a potential deal to be struck between

Brussels and Beijing. Chinese executives hope such talks will

soften the blow.

Analysts expect tariffs of between 10% and 25%.

Every additional 10% on top of the existing 10% levy would

cost EU importers of Chinese EVs about $1 billion, based on 2023

trade data, another blow for a sector struggling with slowing

demand and falling prices at home.

That cost will grow this year as Chinese EV makers expand

exports to Europe.

Imports of China-made EVs have been dominated by western

carmakers Tesla, Renault's Dacia and BMW but

the Commission has forecast that Chinese brands' share of EVs

sold in the EU has risen to 8% from below 1% in 2019 and could

reach 15% in 2025. It says prices are typically 20% below those

of EU-made models.

Chinese models exported to Europe include BYD's Atto 3,

SAIC's MG and Geely's Volvo.

GERMANY WARNING

Top executives at BMW, Mercedes and

Volkswagen have warned against imposing import

duties on vehicles from China, where HSBC ( HSBC ) estimates the German

carmakers generate 20-23% of their global profits.

Among EU governments, France says Europe needs to defend

itself against China's subsidised production, while German

Chancellor Olaf Scholz has said he is not convinced of the need

for tariffs.

Meanwhile the market is evolving as European automakers team

up Chinese counterparts to bring EVs to market more cheaply and

quickly.

Chinese EV makers and suppliers are also starting to invest

in European production, which would avoid tariffs.

Executives at Europe's legacy carmakers told Reuters

recently that stiffer tariffs might temporarily shrink or

eliminate the cost advantage Chinese automakers gain from their

supply chains.

But it will not prevent the reckoning that China's lower

cost EVs will force on them.

Stellantis ( STLA ) CEO Carlos Tavares said carmakers

"don't have much time" to adjust their businesses and depended

on the removal of "regulatory chaos and the bureaucracies that

we have in our backyard".