EU Imposes Higher Tariffs on Chinese Electric Vehicles

No sooner had Chinese EV makers started to make headway in Europe than the European Union announced that it would impose higher tariffs on Chinese EVs, citing unfair subsidies that threaten the EU's EV industry. 

The EU bloc concluded that Chinese battery electric vehicles (BEVs) benefit from substantial government subsidies, which enable them to enter the European market at artificially low prices. 

Therefore, the EU is set to impose temporary tariffs on electric vehicle (BEV) manufacturers. The tariffs will be as high as 38.1% for producers who did not cooperate with the investigation and 21% for those who complied but were not chosen for sampling.

The measures are all but finalized, but if negotiations with Chinese authorities fail to resolve this issue, the tariffs will come into effect on July 4. Definitive measures are expected to be implemented within four months.

Key Chinese manufacturers like BYD and Geely face tariffs of 17.4% and 20%, respectively, while SAIC Motor, sampled during the probe, is subjected to the highest rate of 38.1%. Meanwhile, Tesla, operating a gigafactory in Shanghai, may see individually calculated duty rates based on further scrutiny of its subsidies received in China.

This move has sparked criticism from China, which views the tariffs as a form of protectionism that lacks legal and factual basis. China’s Ministry of Commerce has accused the EU of undermining fair competition and escalating trade tensions, arguing that the new tariffs will disrupt the global automotive supply chain.