The European Commission has updated its extensive investigation into Chinese government subsidies for electric cars. They have announced that Tesla will be subjected to a 9% tax on Chinese-made cars exported to the EU.
The tariffs imposed on Tesla are significantly lower than the average of 21.3% on cooperating companies and 36.3% on non-cooperating companies. These tariffs were applied after Tesla requested individual action as part of the broader EU investigation.
Compared to the 100% tariffs imposed by the US, the 9% EU tariffs are relatively low and will be added on top of the existing 10% tariffs on EVs from China.
EU officials visited Tesla’s Shanghai facility in June and stated that the company has benefitted from low-cost batteries and Chinese government subsidies, including cheap land and export subsidies.
The 9% tariffs are expected to be in effect by October 31st, pending approval from EU member states.
Furthermore, the European Commission announced a slight reduction in tariffs on Chinese-made EVs after discussions with the companies. Under the latest proposal, BYD would face a 17% tariff, Geely 19.3%, and SAIC 36.3%. These tariffs have been revised downwards since the provisional measures were first announced and could change again.
EU officials confirmed that companies will not have to pay provisional tariffs until the deadline, as concluded that European automakers are under a “threat of harm” rather than actual harm like factory closures or job losses.
EU officials emphasized the need for action to prevent the surge in Chinese EV exports from causing significant harm to EU producers. They stated that their laws allow them to act before actual harm occurs in terms of job losses or factory closures.
The Kiel Institute for the World Economy estimated that China’s EV support will reach $5.6 billion by 2022, when direct payments to manufacturers are phased out.
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BYD has been the largest beneficiary, receiving $3.7 billion in support, while Tesla received about $426 million for its Shanghai factory.
According to a report by China trade website Soapbox, 45% of Beijing’s electric car exports between June 2020 and June 2024 were headed to the EU.
Chinese manufacturers ramped up exports in April ahead of expected tariffs, with import registrations of Chinese-made EVs increasing from April to May before declining, as shown by customs data.
Source: www.theguardian.com
