Tesla To Receive Lower EU Tariff For Chinese-Made EVs

The European Commission has announced that as part of the ongoing anti-subsidy investigation, it has informed electric vehicle manufacturers of the finalised tariffs for importing EVs from China.

The Commission announced on Tuesday that it has slashed its planned tariff on Tesla electric vehicles imported from China by more than half, in a welcome development for the Elon Musk firm.

The European Union had announced in June it was planning to institute higher EV tariffs of up to 37.6 percent on Chinese imports while it completed its investigation into allegedly excessive and unfair subsidies from Beijing.

This was to be on top of a 10 percent duty that was already in place for all electric cars imported from China.

Tesla tariffs

The EC said at the time it would impose the following individual duties on three Chinese EV makers, based on estimates of how much state aid each firm received from Beijing: BYD – 17.4 percent; Geely – 20 percent; and SAIC – 37.6 percent.

The European Union’s draft higher tariffs on certain Chinese EV manufacturers kicked in on Thursday 4 July 2024.

But now the European Commission has made “a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures received from interested parties, as well as the conclusion of investigative steps that had not yet been finalised at provisional stage.”

It there has decided the following rates will be imposed.

• BYD: 17,0 percent
• Geely: 19,3 percent
• SAIC: 36.3 percent
• Other co-operating companies: 21.3 percent
• All other non-cooperating companies: 36.3 percent

The European Commission also made the decision “to grant an individual duty rate to Tesla as an exporter from China, established at 9 percent at this stage.”

This 9 percent tariff for Tesla EVs made in China is lower than the 20.8 percent it had indicated in July.

The above tariffs are on top of the EU’s standard 10 percent duty on car imports.

Tesla had requested a recalculation of its rate, to be based on the specific subsidies the company had received from Beijing.

The Commission said on Tuesday it had verified that Tesla received less subsidies from the Chinese government compared with other Chinese EV makers.

Chinese response

China’s commerce ministry said in response it is “firmly opposed to and highly concerned” about the findings, and vowed to take all necessary measures to protect Chinese firms.

The draft findings were based on “facts unilaterally determined by the EU side, not on facts mutually agreed upon,” the ministry was quoted by Reuters as saying in a statement.

China hopes the EU side will expedite the exploration of proper solutions in a rational and pragmatic manner, and take practical actions to avoid the escalation of trade frictions, it added.

Earlier this month the Chinese government launched a challenge at the World Trade Organisation against the EU tariffs.

Final vote

It should be noted that Chinese firms in joint ventures with EU manufacturers may also be eligible for lower duties.

Interested parties have until 30 August to submit their comments on the Commission’s findings.

The proposed final duties will then be subject to a vote by the EU’s 27 states. They will be implemented unless a qualified majority of 15 EU members representing 65 percent of the EU population vote against the tariffs.

Definitive duties will apply by 30 October.

On the other side of the pond, the Biden Administration and the US Commerce Department in May had announced new tariffs of up to 100 percent on a number of Chinese goods, including EVs, which they said were designed “to protect American workers and businesses from China’s unfair trade practices.”