The European Union has reduced the additional tariffs it plans to impose on Tesla’s electric vehicles (EVs) imported from China, slashing the rate from an initially proposed 20.8% to 9%.
This reduction in tariffs for Tesla EVs follows further investigations requested by the company, which prompted the European Commission to reevaluate the extent of subsidies Tesla received from the Chinese government.
The revised tariffs are part of an investigation by the European Commission into alleged high subsidies provided to Chinese EV manufacturers. While Tesla’s case has seen a reduction in the proposed duties, the Commission has maintained that Chinese EV production benefits extensively from government support.
Consequently, other Chinese EV producers could face tariffs of up to 36.3%, slightly down from the original maximum of 37.6%.
Tesla had argued for a recalculation of its EVs tariffs based on the specific subsidies it received, claiming they were less substantial compared to those granted to local Chinese automakers. The Commission’s verification process confirmed the position of Tesla, leading to a reduction in its tariff rate.
This investigation, one of the most high-profile trade disputes between the EU and China in recent years, has drawn objections from Beijing. China’s Ministry of Commerce has asserted that the conclusions were reached unilaterally by the EU and not through mutual agreement.
The ministry has urged the EU to seek a balanced and pragmatic solution to prevent further escalation of trade tensions.
The proposed tariffs, which would be added to the EU’s standard 10% duty on car imports, are intended to level the playing field between European automakers and their Chinese counterparts.
The final tariffs will be determined following the conclusion of the EU’s investigation in the coming months, with interested parties allowed to submit comments on the findings until the end of August.
The European Commission’s decision will ultimately require approval from the EU’s 27 member states. A qualified majority vote, representing 65% of the EU population, would be necessary to reject the proposed tariffs, making it unlikely that the measures will be overturned.
While some Chinese automakers, such as BYD, Geely, and SAIC, may see marginal reductions in their tariff rates due to cooperation with the investigation, the majority of Chinese EV imports are still expected to face high duties.
Added to this, Chinese firms engaged in joint ventures with European manufacturers, like Volkswagen’s SEAT and BMW’s Mini, could benefit from lower tariffs on their China-made vehicles.
The final decision on these tariffs is expected by the end of October, bringing a new chapter in EU-China trade relations and impacting the global electric vehicle market.
