EU to cut down proposed tariffs on Tesla, EVs from China

The European Union is set to revise its proposed final tariffs on electric vehicles (EVs) from China, including those produced by Tesla, following considerations of submissions from affected companies. This information comes from a source familiar with the matter, who disclosed the details on Tuesday.

For Tesla, the proposed tariff rate is expected to decrease from the initially suggested 9 per cent to 7.8 per cent. This adjustment represents a significant reduction for the American EV manufacturer. However, not all companies will see changes in their tariff rates. BYD, for instance, will continue to face a 17 per cent tariff, unchanged from the previous proposal.

Other Chinese automakers will see slight modifications to their tariff rates. Geely’s rate is set to be marginally reduced from 19.3 per cent to 18.8 per cent. For companies that have not cooperated with the EU’s investigation, including SAIC, a peak rate of 35.3 per cent will be applied.

It’s important to note that these new tariffs will be imposed on top of the EU’s standard 10 per cent import duty for cars, potentially significantly increasing the cost of Chinese-made EVs in the European market.

The European Commission, which is leading the anti-subsidy investigation into EVs manufactured in China, has declined to comment on these developments. Tesla has not yet responded to requests for comment from Reuters.

This revision comes after the EU’s initial proposal for final duties last month, which had already established a separate, lower rate of nine per cent for Tesla EVs. This was a substantial reduction from the higher duty rate set for all other cooperating companies, which now stands at 20.7 per cent.

The 20.7 per cent tariff is intended to apply to various Chinese producers, including Chery, Great Wall Motor Co, and NIO, as well as several joint ventures between Chinese companies and EU automakers.

Following the initial proposal, China and the affected companies were given a 10-day period to submit their comments. The Commission has taken these submissions into account in establishing the revised tariff rates.

The implementation of these proposed final duties is subject to a vote by the EU’s 27 member states. The duties will be put into effect unless a qualified majority opposes them. This majority would require 15 EU members representing 65 per cent of the EU population to vote against the proposal.