The EU said China could be breaking trade rules by applying the same tariff for finished cars to the import of spare parts that make up 60 percent or more of the value of the final vehicle.
Beijing has 10 days to respond and 30 days to start talks. If the issue can‘t be solved within 60 days, all three countries can ask a WTO panel to hear and rule on the dispute.
The European Commission said China has not yet provided "sufficient reassurance" that it will deal with the problem.
"Consultations will allow us to clarify the legal issues and find a mutually satisfactory solution. It remains my strong preference and intention to seek an amicable solution to this issue," EU Trade Commissioner Peter Mandelson said.
The EU said the U.S. would also seek talks with China on the issue Thursday.
It said carmakers have to source 40 percent of the spare parts by value in China to avoid the tax.
"The EU believes it may constitute an internal tax on imported goods," it said. "This can be problematic for EU producers in China who are not able to import parts from their own factories in Europe without unfair tariffs."
China claims the tariffs are intended to stop whole cars being imported in large chunks to avoid higher tariff rates for finished cars. The EU said China promised not to treat parts as whole cars when it joined the WTO.
European carmakers have between 20 percent and 25 percent of the car production market in China.
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