LONDON, June 12 (Reuters) - The European Commission's

decision to slap tariffs on imported Chinese EVs could have

far-reaching effects for European automakers, as a possible

trade war would hurt not only their business in China but also

their own imports of Chinese-made cars.

Germany's automakers in particular have a lot to lose in

China and the announcement on Wednesday leaves them fretting

over a decision BMW CEO Oliver Zipse described as the

"wrong way to go".

Tariffs on Chinese-made electric vehicles of up to 38.1% -

equating to billions of euros - will be levied from July, but

that is unlikely to deter China's automakers from exporting to

Europe because they can absorb the extra cost and still make a

profit.

Most Chinese automakers remained quiet after the tariffs

were announced, but EV maker Nio said that while it

opposed the decision, in Europe its "commitment to the EV market

remains unwavering".

Also, China's BYD and Chery have

already announced plans to build cars in Europe, which would

avoid the tariffs.

Will Roberts, head of automotive research at Rho Motion,

said that while Chinese automakers have room to absorb tariffs,

the "true test from today's announcement will be whether Beijing

will retaliate in kind".

"Europe's manufacturers still rely on the Chinese market, so

declining profits from the East would only slow their ability to

transition effectively" to electric vehicles, he added.

HIGH STAKES

It has become a high-stakes game for Germany's automakers.

China accounted for nearly 32% of sales at BMW in the first

quarter and around 30% for rivals Volkswagen and

Mercedes-Benz.

VW shares fell 1.2% on Wednesday, among the biggest

decliners on the euro zone's blue-chip stock index,

BMW dropped 0.9% to its lowest since November and Mercedes was

down 0.5% at its weakest since February.

Retaliation could thus be painful for those companies and

Germany's manufacturing economy, prompting Chancellor Olaf

Scholz to warn during a speech at an Opel factory at the weekend

that "isolationism and unlawful customs barriers...that

ultimately only makes everything more expensive and everyone

poorer."

VW said the "negative effects" of the tariffs "outweigh any

potential benefits for the European and especially the German

automotive industry".

Mercedes CEO Ola Kaellenius said the "dismantling of

restrictions and expansion of fair and free trade has led to

economic growth. So we shouldn't go in the other direction now".

But the tariffs will also hit the cars that European

automakers have made in China for European consumers.

Renault, for instance, imports the affordable

Chinese-made Dacia Spring EV into Europe, and its Chinese joint

venture partner Dongfeng is on the list of those

companies likely to be hit with a 21% tariff.

Renault did not comment on the EU's tariff announcement.

Tesla imports Chinese-made EVs into Europe and BMW

imports Mini EVs and the iX3.

Europe's auto industry is also reliant on Chinese

components, particularly for EVs as China dominates so much of

the supply chain.

Speaking to analysts last month, BMW CEO Zipse warned that

sparking a trade war could have dire consequences for the

transition to EVs because it is impossible to make cars in

Europe without Chinese imports.

"There is no Green Deal in Europe without resources from

China," Zipse said.