EU tariffs on Chinese EVs go into effect, negotiations with Beijing to continue
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The European Union has raised tariffs on Chinese-made electric vehicles to as high as 45.3% starting Wednesday, after a detailed anti-subsidy investigation that has been criticized by Beijing as well as the broader automaking industry.
In addition to the EU’s standard 10% car import duty, EVs made in China will be subject to the following tariff rates: Tesla (NASDAQ:TSLA) 7.8%; BYD (OTCPK:BYDDF) 17%; Geely (OTCPK:GELYF) 18.8%; cooperating companies including XPeng (NYSE:XPEV) and NIO (NYSE:NIO) 20.7%; SAIC and all other firms 35.3%.
The European Commission believes the additional tariffs are necessary to protect EU automakers from “unfair” competition from Chinese EV makers that benefit from state subsidies, allowing them to flood the European market with cheaper cars.
It also said China’s spare EV production capacity significantly exceeds demand in China. To note, the Chinese market is nearly three times the size of the EU market.
“China does not agree with or accept the ruling and has filed a lawsuit under the WTO dispute settlement mechanism,” a commerce ministry spokesperson said.
“We also noticed that the EU side indicated it would continue to negotiate with China on price commitments,” the spokesperson added, signaling more consultations to “avoid escalation of trade frictions.”