The European Union said on Tuesday that planned tariffs on Tesla vehicles being imported from China would be cut to 9% from 20.8%, while also reducing a number of planned import duties on other electric vehicle firms.
TakeAway Points:
- The European Commission announced in June that it would increase taxes on Chinese imports of electric vehicles, citing the fact that they “heavily benefit from improper subsidies” and represent a “threat of economic loss” to European EV manufacturers.
- The draft decision to “impose definitive countervailing tariffs on imports of battery electric vehicles (BEVs) from China” was made public by the commission on Tuesday.
- The Commission announced that instead of the originally planned rate of 20.8%, Tesla would now be subject to charges of 9% on imports into the EU.
- The Elon Musk-led company had asked for the proposed tariffs to be adjusted in order to account for some Chinese subsidies that it receives.
Tariffs on Tesla vehicles to be cut to 9%
These tariffs will come on top of existing duties of 10% the EU has already imposed on imports of battery electric vehicles.
In June, the EU said it would slap higher tariffs on Chinese electric vehicle imports, which it found benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to EV producers in Europe.
The European Commission, the executive arm of the EU, announced a preliminary conclusion that the battery-electric vehicle value chain in China “benefits from unfair subsidisation” and pronounced that it is in the EU’s interest to impose “provisional countervailing duties” on BEV imports from China.
The EU Commission disclosed on Tuesday its draft decision to “impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China.”
The regulatory body said that after receiving comments from interested parties on its planned tariffs, it would make a “slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures.”
Electric vehicles made by Tesla in China will now face duties of 9% on imports to the EU. That is down from an anticipated rate of 20.8%, which the EU signed off on in an earlier decision in July.
Tesla shares see an increase
Tesla shares rose more than 1% in U.S. morning trading following the EU’s draft decision.
The EU said it made the decision to grant Tesla its own lowered individual duty rate as an exporter from China.
It comes after Elon Musk’s electric vehicle maker made a “substantiated request” to the EU that planned tariffs on its China-made EVs be recalculated to reflect specific subsidies the company receives in China.
BYD, the Warren Buffett-backed EV firm, saw its tariff rate reduced from 17.4% to 17%; Geely from 19.9% to 19.3%, SAIC from 37.6% to 36.3%. BYD, Geely and SAIC did not immediately respond to a request for comment outside of working hours in China.
Other companies cooperating with the EU in its investigation into China’s heavy subsidization of EVs, will face tariffs of 21.3%, the commission said. This is higher than the 20.8% rate cooperating companies would have faced under the EU’s previous July decision.
For those not cooperating, they will be slapped with 36.3% import duties. That is down from 37.6% previously.
