EU Commission announces preliminary tariffs up to 38% on Chinese EVs

3 months ago 15

The EU will impose additional tariffs of 17.4% to 38.1% on electric cars produced in China, the European Commission announced on Wednesday (12 June), as preliminary results from its anti-subsidy investigation confirmed prices are being distorted by Chinese state support.

The value chain of Chinese electric cars “benefits from unfair subsidisation, which is causing a threat of economic injury to EU battery electric vehicles producers,” EU Commission Vice-President Margaritis Schinas said on Wednesday (12 June).

“When our partners breach the rules, we will assert our rights,” Executive Vice-President Valdis Dombrovskis said in a statement.

“Today we have reached a milestone in our anti-subsidy investigation,” he said, adding that “this is based on clear evidence of our extensive investigation and in full respect of WTO rules.”

Duties will differ per carmaker, with Chinese state-owned manufacturer SAIC facing the highest duty at 38.1%, Chinese Geely to face 20% and BYD 17.4%.

Western brands producing electric cars in China – including Tesla, Dacia and BMW – will face a 21% duty.

Although formally EU tariffs would be imposed as of 4 July 2024, the announcement from the EU executive’s trade unit – headed by Commissioner Valdis Dombrovskis – is preliminary.

“We will now engage with Chinese authorities and all parties with a view to finalising this investigation,” Dombrovskis said.

Sources following the matter expect the move is intended to kick start negotiations with China and possibly change the final rate, if not scrapping it all together, in the final decision, which has to happen by November 2024.

The final rate of the countervailing duties will then be put to a vote by the Council – where only a “qualified” majority of member states, meaning at least 15 countries representing 65% of the total population, would be able to block it.

Before the decision, the Commission was subject to heavy lobbying, with the Chinese government threatening to retaliate against the EU with measures against the agricultural or aviation sector. European carmakers, too, stepped up warnings against the move as they fear they could become the target of countermeasures taken by the Chinese government.

In 2023, 19.5% of electric vehicles sold in Europe were made in China, according to NGO Transport & Environment, many of which were cars of brands of Western carmakers such as Tesla, Dacia or BMW.

Chinese brands such as BYD and MG, meanwhile, could reach a market share of 11% this year, the organisation estimates.

[Edited by Anna Brunetti/ Chris Powers]