MUNICH, Sept 11 (Reuters) - Volkswagen's

Spanish SEAT division is in constructive talks with Brussels

about possibly freeing an electric car it produces in China from

stiff EU import tariffs, its chief executive told Reuters.

The CUPRA Tavascan SUV coupe - which is made in China and

exported to Europe - has been subject to an additional 20.7%

tariff on top of an existing 10% duty since the EU imposed fresh

duties on Chinese-made EVs last year.

Markus Haupt, interim CEO of Volkswagen's SEAT SA division

that includes the SEAT and CUPRA brands, said talks with the

European Commission about an exemption had been going on for

several months and had entered the home stretch.

"We are confident that we will soon see a positive outcome

for us," Haupt said at the IAA auto show in Munich, describing

the talks as "very good".

Haupt said that while CUPRA Tavascan was made in China, it

is designed in Spain and developed in Europe, where even some of

the components come from, so it should not be affected by EU

tariffs.

SEAT/CUPRA, which accounted for around 7% of vehicle sales

at the Volkswagen group last year, reported a 91% drop in its

operating profit in the first half of 2025, partly due to the

stiff tariffs.

SEAT, which has been fully absorbing the tariffs on the

CUPRA Tavascan, in February warned that around 1,500 of its

workers were at risk should tariffs remain at current levels.

Haupt also said that a decision to enter the U.S. market

with the CUPRA brand by 2030 had been postponed until a later

stage in light of local tariffs.

Instead, CUPRA is currently looking at potentially launching

in the Middle East, Haupt said.

"There are a lot of young people there, a lot of wealthy

young people," Haupt said, adding CUPRA was appealing to the

youngest customers in the Volkswagen group.

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