European Commission Boosts Duty on Chinese BEVs

The European Commission announces plans to apply a 19% tariff on Chinese-produced Tesla models imported to European markets beginning Oct. 30.

The increased tariff results from a trade defense investigation by the European Commission into Chinese battery-electric-vehicle imports. 

It sees Tesla slapped with an additional 9% levy on top of the existing tax duty of 10% on all foreign-produced cars sold in Europe.

However, the tariff applied to Chinese-produced Tesla models is significantly lower than the 46.3% percent import duty imposed on BEV models from Chinese state-owned automaker SAIC.

In justifying the measures, the EC claims Tesla benefited from subsidized land for the construction of its Shanghai-based manufacturing site in operation since 2019.

It also claims Tesla enjoys tax breaks and reduced rates on the purchase of electric-vehicle batteries, as well as other forms of financial support from the Chinese government.

The increase in tariffs on Chinese-produced BEVs represents a more aggressive approach by the EC into what it calls “growing concerns about the rapid rise in low-priced exports of electric vehicles coming from China.”

Initial tariffs were announced in July.

In a statement made to Chinese state broadcaster CCTV, the China Association of Automobile Manufacturers (CAAM) says it firmly opposes punitive tariffs for Chinese-made electric vehicles.

The decision to increase tariffs brings “enormous risks and uncertainty” for China’s operations and investment in the EU, CAAM says, adding it will have a “serious adverse impact on driving the European Union automotive industry, increasing local employment opportunities in the European Union and achieving green and sustainable development.” 

In its latest announcement, which is described as an intermediate procedural step open to further discussions and findings, the EC outlined additional tariffs for a range of different Chinese automakers.

They include BYD, which has been slapped with a 17% levy, raising its overall import tax duties to 27%.

Geely receives a 19.3% levy, increasing the import tax on its models to 29.3%.

SAIC, parent company of the MG brand, draws a 36.3% levy, meaning its electric models now face import taxes of up to 46.3%.

The increased tariffs do not exclude European automakers with joint venture production operations in China.

BMW-owned Mini, which produces the electric-powered Cooper SE and Aceman in cooperation with Great Wall Motor in the Chinese city of Zhangjiagang, will see its levy increased to 21.3% for an overall import duty of 31.3%.

The same rate applies to Volkswagen-owned brand Cupra, whose new electric-powered Tavascan SUV is produced in a joint venture with JAC in the Chinese city of Hefei.

Smart, whose electric #1, #3 and upcoming #5 models are produced in a joint venture between Geely and Mercedes-Benz in China, is set to receive the same tariff.

Other Chinese automakers not named in the announcement will attract the same 36.3% tariff as SAIC, says the EC.

The official European Commission statement:https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4301