Tesla faces lowest duty on Chinese-made cars exported to EU
Tesla will face a 9% levy on its Chinesemade cars exported to the EU, the European Commission has said, as it issued an update on its sweeping investigation into Beijing’s “unfair” subsidies of electric vehicles.
The tariff on Tesla – far lower than the 21.3% average on companies that cooperated with the EU investigation and 36.3% on those that did not – came after the California-headquartered firm requested individual treatment as part of the wider Brussels inquiry.
The levies – far lower than the 100% tariffs imposed by the US – come on top of the EU’s existing 10% duty on EVs from China.
EU officials visited Tesla’s Shanghai operations in June and said on Tuesday that the company had benefited from Chinese state subsidies, mainly belowcost batteries, but also cheap land and grants for exporters.
The 9% tariff will apply by 31 October at the latest, subject to approval from EU member states.
The Tesla decision was revealed as the commission announced modest downward tweaks to the tariff rates on Chinese-made EVs after technical talks with the companies.
Under the latest proposals, China’s BYD, which vies with Tesla for the title of the world’s largest producer of electric vehicles, will face a 17% tariff; Geely 19.3% and SAIC 36.3%. The three rates have been revised downwards since provisional measures were published in June and could be changed again.
EU officials also announced on Tuesday that no company would have to pay provisional tariffs before the likely entry into force by the end of October. Companies are being spared interim duties because EU officials have concluded that European carmakers face “the threat of injury” rather than actual harm, such as factory closures and job losses.
An EU official said if nothing was done, the growth of subsidy-powered Chinese EV exports would soon lead to “material injury” for EU producers, adding: “Our legislation allows us to act before people are fired and factories are shut down.”
The Kiel Institute for the World Economy thinktank estimated earlier this year that China’s aid to EVs amounted to about $5.6bn (€5.05bn, £4.3bn) in 2022 when direct payments to manufacturers were phased out.
By far the biggest beneficiary was BYD, which received $3.7bn. Although Tesla’s aid was dwarfed by its Chinese rival, it was the second biggest beneficiary, with about $426m in support for its Shanghai plant.
The China trade specialist website Soapbox released an analysis this week of figures from the European Commission’s data body Eurostat and Chinese customs authorities that found the EU accounted for 45% of the total value of EVs exported by Beijing between June 2020 and June 2024.
Customs data shows a spike in exports in April by China’s manufacturers ahead of anticipated tariffs, while at the same time registrations of imports of Chinese EVs increased between April and May, dipping thereafter.