Tesla will face a 9% tax on its China-made cars exported to the EU, the European Commission said, issuing an update on its wide-ranging investigation into Beijing’s “unfair” subsidies for electric vehicles.
The tariff on Tesla – much lower than the average of 21.3% for companies that cooperated with the EU investigation and 36.3% for those that did not – came after the California-based firm requested individual treatment as part of the broader Brussels probe.
The levies, much lower than the 100% tariffs imposed by the United States, come on top of the 10% tariff the EU already applies to electric vehicles from China.
EU officials visited Tesla’s Shanghai operations in June and said Tuesday the company had benefited from Chinese state subsidies, mainly below-cost batteries but also cheap land and subsidies for exporters.
The 9% tariff will be applied no later than 31 October, subject to approval by EU member states.
Tesla’s decision came as the commission announced modest downward adjustments to tariff rates on Chinese-made electric vehicles after technical talks with companies.
Under the latest proposals, China’s BYD, which is competing 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%. All three rates have been revised downwards since the provisional measures were published in June and could be amended again.
EU officials also announced Tuesday that no company would have to pay provisional tariffs before they likely take effect at the end of October. Companies are being spared the provisional tariffs because EU officials have concluded that European automakers face “the threat of harm” rather than actual damage, such as factory closures and job losses.
An EU official said that if nothing is done, the growth of Chinese exports of subsidy-driven electric vehicles will soon lead to “material harm” to EU producers, adding: “Our legislation allows us to act before people are laid off and factories are closed.”
The Kiel Institute for the World Economy think tank estimated earlier this year that China’s support for electric vehicles would amount to about $5.6bn (€5.05bn, £4.3bn) by 2022, when direct payments to manufacturers would be phased out.
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The biggest beneficiary was BYD, which received $3.7 billion. While Tesla’s aid was small compared to its Chinese rival, it was the second-biggest beneficiary, with some $426 million in support for its Shanghai plant.
China trade website Soapbox this week published an analysis 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 electric vehicles exported by Beijing between June 2020 and June 2024.
Customs data shows a surge in exports by Chinese manufacturers in April before the anticipated tariffs, while at the same time Chinese electric vehicle import registrations rose between April and May, before falling back.