GAC, China's state-owned auto company, is considering manufacturing electric vehicles within the European Union to avoid hefty tariffs approved earlier this month, according to a report Sunday.

GAC general manager of international business Wei Heigang told Reuters that the company was "actively exploring this possibility" following the Oct. 4 vote by the European Commission, the EU's governing body, to impose import duties of up to 45% on Chinese-made EVs.

Those tariffs are set to take effect next month and last for five years.

"The tariffs issue definitely has an impact on us. However, all this can be overcome in the long term...I am positive there is going to be a way to get it all resolved," Wei said. "Local production would be one of the ways to resolve this."

Negotiations are at a very early stage and GAC is considering whether to build a new plant or share or take over an existing one, Wei said.

GAC is one of China's largest carmakers and is looking to sell 500,000 vehicles overseas by 2030.

It doesn't sell EVs in Europe but will unveil an electric SUV tailored to the market at the Paris Auto Show that begins on Monday, Reuters said.

That model, the Aion V, is reportedly set to go on sale in mid-2025 priced below about $44,000.

Several Chinese EV companies are planning to make EVs in the EU, with Leapmotor having started using existing capacity at Stellantis' plant in Tychy, Poland, in June, according to Reuters.

Last year, EV giant BYD became the first Chinese car company to strike a deal for a new European factory, in Hungary. It reached a second agreement in July for a $1 billion plant in Turkey.

Chery had hoped to start building EVs in a former Nissan factory in Spain before the end of the year but pushed back that goal to October 2025, Bloomberg reported last month.

Last year, Chinese cars accounted for 4% of European sales. That share is expected to grow to 7% by 2028, according to the AlixPartners consulting company, Reuters said.