EU announces extra import tariffs on Chinese EVs 

China-made battery electric vehicles (BEVs) will soon face import tariffs when entering the European Union’s market, where demand for these eco-friendly vehicles has surged in recent years.

On Wednesday, the European Commission announced its first provisional decision under an anti-subsidy investigation into BEVs assembled in China, with varying tariffs by brand:

  • BYD: 17.4%
  • Geely: 20%
  • SAIC: 38.1%
  • Other Chinese BEV producers that cooperated in the investigation but were not individually assessed: 21%
  • Other Chinese BEV producers that did not cooperate: 38.1%

These tariffs will be added to the existing 10% import duty, exceeding industry expectations of a 20% tariff. The measures will be implemented in early July unless China offers effective solutions to address its unfair trade practices. Beijing has consistently refused to engage with Western allies on trade issues and often denies responsibility for the problems.

The decision will affect both Chinese and Western brands operating in China, though not equally. Shenzhen-based BYD, which aims to capture 5% of the EU’s BEV market, was a primary focus of the inquiry. Tesla, a key player in the sector, has filed a “substantiated request” and might receive a customised tariff rate later this year.

Sales of China-made BEVs have soared, rising from 57,000 units in 2020 to over 437,000 in 2023, according to Eurostat, including models from Western companies like BMW, Renault, and Tesla. During the same period, the transaction value increased from €631 million to €9.66 billion.

Brussels is concerned that due to Beijing’s substantial subsidies, European companies will struggle to compete with Chinese producers and may be pushed out of the lucrative sector, as happened with solar panels. 

The Commission has identified multiple forms of state aid in China, including grants, low-interest loans, state-backed credits, tax rebates, VAT exemptions, and discounted goods and services.

The provisional decision signals the Commission’s belief that the threat is serious and requires decisive action. The additional tariffs aim to make China-made BEVs more expensive in the EU, aligning their prices more closely with European competitors to ensure fair competition. How much the price gap will narrow remains to be seen.

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