China’s Guangzhou Automobile Group (GAC) will produce its electric Aion V model at a Magna facility in Austria, the companies said on Thursday, a move that could help the automaker sidestep hefty European Union tariffs on China-made electric vehicles.

Production will take place at Magna’s plant in Graz, which is capable of manufacturing gasoline, hybrid and battery-electric vehicles on shared lines.

The decision comes after the EU imposed provisional duties of up to 37.6% on Chinese-made EVs last year, citing concerns that subsidized imports could distort the bloc’s market.

“Europe is a vital market in GAC’s global development,” said Wei Haigang, president of GAC International.

Roland Prettner, president of Magna Steyr’s contract manufacturing division, said the partnership will enable automakers such as GAC to localize production efficiently as they expand into Europe.