SHANGHAI ― Magna Steyr is about to finalize contracts with Chinese automakers Xpeng and GAC Motor Co. to assemble electric vehicles at its plant in Graz, Austria, with semi-knocked down kits imported from China, according to Kleine Zeitung.

The contracts, which could be signed as early as June, will enable the two Chinese automakers to avoid paying hefty additional tariffs the European Union imposed on China-made EVs in October, the Austrian newspaper reported March 15.

The deals will also bring much-needed new business to Magna Steyr, the vehicle contract manufacturing unit of Magna International, the paper said.

But the two Chinese automakers are not expected to make sizable investments in the projects initially because they only need to assemble a small number of EVs to test market demand in Europe, the newspaper said.

Starting Oct. 31, EV imports from China are subject to anti-subsidy tariffs of up to 35.3 percent on top of an existing 10 percent duty, following a probe by the European Commission, the executive body of the EU.

Xpeng and GAC would face extra tariffs of 20.7 percent if they export EVs from China to member countries of the EU.