EU Reduces Import Tariffs on Tesla’s China-Made Electric Vehicles
The European Commission has revised import tariffs on Chinese-made electric vehicles, significantly lowering Tesla's rate from 20.8% to 9%, following an investigation into Chinese EV subsidies.
Highlights
- The European Commission has updated import tariffs on Chinese-produced electric vehicles, cutting Tesla's tariff from a provisional 20.8% to 9%.
- These tariff adjustments come after a thorough investigation into subsidies provided by China to its domestic EV manufacturers.
- Tesla had previously indicated that higher tariffs might force price increases for its EVs sold in Europe.
The European Commission (EC), which enforces trade regulations within the European Union (EU), announced on Tuesday a significant reduction in tariffs for Tesla's China-manufactured electric vehicles. This update follows last month's provisional tariff announcement.
Alongside the existing 10% tariff on Chinese imports, Tesla vehicles produced in China will now face a 9% tariff. In comparison, competitors such as BYD, Volvo's parent company Geely, and state-owned SAIC will be subject to tariffs of 17%, 19.3%, and 36.3%, respectively. Other manufacturers cooperating with the EC's investigation will pay 21.3%, while those not cooperating will incur a 36.3% tariff.
Tesla’s reduced tariff is notably lower than both its Chinese rivals and the initially proposed 20.8% rate, reflecting a favorable outcome from the investigation.
Previously, Tesla warned that the tariffs could lead to increased prices for their China-made models in the European market. The investigation was initiated due to concerns that Chinese government subsidies might enable EV exports at prices low enough to disrupt fair competition within Europe.
China Challenges Evidence of Market Harm from EV Subsidies
The China Chamber of Commerce to the EU (CCCEU) responded to the tariff decision by stating there is "no sufficient evidence" that Chinese electric vehicles negatively impact the European market. The CCCEU emphasized that factors such as industrial scale and supply chain efficiencies play a more significant role than government subsidies in the competitive pricing of Chinese EVs.
Following the announcement, Tesla shares rose by 1.5%, reaching $226.09 as of 10 a.m. ET on Tuesday.
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