Tesla, the American electric vehicle manufacturer, is set to face a 9% levy on its Chinese-made cars exported to the European Union. This decision comes as a result of the European Commission’s investigation into Beijing’s „unfair“ subsidies of electric vehicles. The tariff on Tesla is significantly lower than the average tariffs imposed on companies that cooperated with the EU investigation, which stands at 21.3%, and even lower than the 36.3% tariff on companies that did not cooperate.
The European Commission’s decision to impose a 9% levy on Tesla’s Chinese-made cars is a part of a wider inquiry into China’s subsidies for electric vehicles. EU officials visited Tesla’s operations in Shanghai in June and found that the company had benefited from Chinese state subsidies, including below-cost batteries, cheap land, and grants for exporters. The 9% tariff is expected to be implemented by October 31st, pending approval from EU member states.
In addition to the 9% levy on Tesla, the EU has also announced tariff rates for other Chinese electric vehicle manufacturers. BYD, a major competitor to Tesla, will face a 17% tariff, while Geely will face a 19.3% tariff and SAIC will face a 36.3% tariff. These rates have been revised downwards since provisional measures were published in June and may be subject to further changes.
The European Commission has stated that no company will have to pay provisional tariffs before the likely entry into force by the end of October. This decision was made based on the conclusion that European carmakers face „the threat of injury“ rather than actual harm, such as factory closures and job losses. The EU officials believe that if action is not taken, the growth of subsidy-powered Chinese EV exports could lead to „material injury“ for EU producers.
According to the Kiel Institute for the World Economy, China’s aid to electric vehicles amounted to approximately $5.6 billion in 2022, with BYD being the biggest beneficiary receiving $3.7 billion. Tesla, on the other hand, received around $426 million in support for its Shanghai plant. The EU accounted for 45% of the total value of EVs exported by China between June 2020 and June 2024, according to data from Eurostat and Chinese customs authorities.
In conclusion, the European Commission’s decision to impose a 9% levy on Tesla’s Chinese-made cars exported to the EU is part of a broader effort to address China’s subsidies for electric vehicles. The tariffs imposed on Tesla and other Chinese electric vehicle manufacturers aim to level the playing field for European carmakers and prevent potential harm to the industry. The ongoing investigation and implementation of tariffs reflect the EU’s commitment to fair competition in the electric vehicle market.