Tesla may soon be subject to specially calculated duties on its electric vehicles (EVs) produced in China and imported into Europe, as part of the European Union’s decision to impose higher tariffs on Chinese-made EVs.
The European Commission announced this week provisional duties of up to 38% on Chinese electric vehicles, set to take effect from July 4. These measures are part of the EU’s broader strategy to counter what it views as unfair competition from subsidized Chinese manufacturers.
This decision will impact Tesla. Giga Shanghai plays a crucial role in the automaker’s global strategy, producing nearly a million vehicles annually. In 2023, approximately 347,000 vehicles from this facility were exported, many destined for the European market.
However, as the EU moves forward with its tariff plans, Tesla is pushing for a more favorable assessment of its situation. The company argues that it has received less substantial state support compared to other Chinese manufacturers.
A spokesperson for the European Commission, Olof Gill, confirmed that Tesla has requested an individual examination to potentially lower its tariff rate. “Following a substantiated request, Tesla may receive an individually calculated duty rate at the definitive stage,” the Commission noted in a press release.
The EU’s tariff hike affects not only Tesla but also major Chinese EV manufacturers like BYD, Geely, and SAIC. BYD will face a 17.4% tariff on its battery electric vehicles (BEVs), while Geely and SAIC will see tariffs of 20% and 38.1%, respectively.
Interestingly, plug-in hybrids appear to be exempt from these tariffs, potentially providing an advantage for companies like BYD that produce both BEVs and plug-in hybrids.
In the US, the Biden administration recently imposed 100% tariffs on Chinese EVs. While this would not impact Tesla as they do not export any cars from China to the US, Elon Musk has voiced his opposition to these measures, saying, “Neither Tesla nor I asked for these tariffs. Tesla competes quite well in the market in China with no tariffs and no deferential support. I’m in favor of no tariffs.”
