Key Takeaways
- The European Commission, the European Union’s enforcement arm, on Tuesday announced updated import tariffs on Chinese-made electric vehicles (EVs), with Tesla’s cut to 9% from a provisional 20.8%.
- The updated tariffs are the result of the EC’s investigation into China’s subsidizing domestically produced EVs.
- Tesla previously had warned that it could have to raise prices in Europe to respond to the tariffs.
The European Commission (EC), the European Union’s (EU) enforcement arm, on Tuesday announced updated import tariffs on Chinese-made electric vehicles (EVs), with Tesla’s (TSLA) cut significantly from a provisional rate announced last month.
On top of an existing 10% tariff for Chinese imports, China-made Tesla vehicles will face a 9% tariff, while competitors BYD (BYDDY), Volvo parent Geely (GELYF), and state-owned SAIC will have to pay tariffs of 17%, 19.3%, and 36.3%, respectively. Other companies that participated in the EC’s investigation into Chinese subsidies will pay a tariff of 21.3%, while non-cooperating manufacturers will pay a 36.3% tariff.
Tesla’s 9% tariff is not only less than those of its Chinese competitors, it’s also significantly lower than it would have had to pay under a provisional version of the plan announced last month, when it was included in the cooperating producers group at 20.8%.
Tesla had previously warned customers that prices of its Chinese-made models sold in Europe could be forced higher because of the tariff. European regulators initially launched the probe into EV tariffs over concerns that subsidies from the Chinese government were allowing EV makers in the country to export cars at prices low enough to harm competition in European markets.
China Says ‘No Sufficient Evidence’ Its EVs Harm European Market
The China Chamber of Commerce to the EU (CCCEU) said in a statement in response to the tariffs that there is “no sufficient evidence” that Chinese EVs harm the European market. The CCCEU also said things like industrial scale and supply-chain advantages are a bigger factor than governmental subsidies in the competitiveness of the vehicles.
Tesla shares were up 1.5% to $226.09 as of 10 a.m. ET Tuesday.