Tag: Tesla

Tesla Secures Reduced EU Tariffs on Chinese-Made EVs

Adler MorisLeave a comment

BRUSSELS, Aug 20 (Reuters) – Tesla is set to benefit from a reduced tariff on its China-manufactured electric vehicles exported to the European Union. This development comes after the European Commission revised its proposed punitive duties on Chinese-made EV imports on Tuesday. The adjustments are part of a draft report from the Commission, which is leading the EU’s highest-profile investigation into alleged Chinese subsidies—a probe that has sparked threats of retaliation from Beijing.

The Commission argues that the tariffs are necessary to create a level playing field, countering what it considers unfair Chinese subsidies. Initially, a 20.8% tariff had been suggested for Tesla, but this has now been reduced to 9%. The Commission also indicated that certain Chinese companies in joint ventures with EU automakers might also see their planned punitive duties lowered.

These proposed tariffs would be in addition to the EU’s standard 10% duty on car imports.

Tesla’s Tariff Reduction and Ongoing Investigations

Tesla had requested that its tariff rate be recalculated based on the specific subsidies it received. The European Commission confirmed on Tuesday that Tesla had indeed benefited less from Chinese government subsidies compared to other Chinese EV manufacturers investigated by Brussels. Despite this, the Commission still maintains that Chinese EV production has been significantly supported by extensive subsidies and has proposed final duties of up to 36.3%. This is slightly lower than the maximum provisional duty of 37.6% set in July for non-cooperating companies.

Tesla was among the companies that cooperated with the EU’s anti-subsidy investigation. The Commission noted that the three sampled companies—BYD, Geely, and SAIC—would also receive slightly reduced provisional duties. For BYD, the new rate is 17.0%, Geely at 19.3%, and SAIC at 36.3%. These adjustments are down from the provisional duties set in July, which ranged from 17.4% to 37.6%.

Chinese companies in joint ventures with EU automakers might also qualify for the lower duty rates planned for their Chinese partners, rather than automatically facing the highest tariffs.

Next Steps and Political Implications

The planned tariffs are currently a draft and could become the EU’s final measure on Chinese-made EVs once the ongoing investigation concludes in about two months. Interested parties have until Aug. 30 to submit comments on the Commission’s findings. The proposed final duties will then be subject to a vote by the EU’s 27 member states. The Commission’s proposal will be adopted unless a qualified majority—15 EU members representing 65% of the EU population—votes against it, a threshold that is rarely met, especially on politically sensitive issues.

In a preliminary vote in July, 12 EU members supported the provisional tariffs, four opposed them, and 11 abstained. Definitive duties, which would typically apply for five years, are expected to be enforced by Oct. 30.

Until then, negotiations between Brussels and Beijing could still lead to a compromise that might avert or soften the proposed tariffs. Meanwhile, China has launched a challenge at the World Trade Organization.

The European Commission estimates that Chinese brands’ share of the EU market has risen from below 1% in 2019 to 8% today, with a projection that it could reach 15% by 2025. The Commission also noted that Chinese-made EVs are typically priced 20% below their EU-made counterparts.