Whenever german business and politics decide something, its always about the money and job preservation
This about PRC localization, EU can't do shit. Think about insinuation if they tried? EU incumbent carmakers from economic giants, Germany, France, wants to prevent rest of EU from access to cheap cars to protect their industry and maintain economic hierarchy. What happens once PRC plants opens up in Spain, Hungary for whom DE, FR auto dying is now opportunity? Reality is EU is not so unified that smaller countries want to live in shadow of DE and FR forever. Once localized PRC plants take root, they become daggers vs incumbent EU producers instead of shields vs EU protectionism - they will be supported locally and the geopolitics of banning would break EU.
In Spain, they dont do that and adaption and dealerships for Chinese EVs is taking off nicely, I ask every single owner I can if they're happy with the service and the cars and all of them have never been happier. Subjective, yes, but I welcome the Chinese cars and free markets:-)