EU members vote to impose tariffs on China-made electric vehicles

The European Commission announced on Friday that its proposal to impose tariffs on imports of battery electric vehicles from China received the necessary support from EU member states. Reports indicate that 10 EU members backed the tariff proposal, five voted against, and 12 members abstained from voting.

The tariffs range from 7.8% for Tesla (TSLA) to as high as 35.3% for SAIC, and are on top of the 10% import duty for vehicles imported into the EU.

“Today, the European Commission’s proposal to impose definitive countervailing duties on imports of battery electric vehicles from China has obtained the necessary support from EU Member States for the adoption of tariffs. This represents another step towards the conclusion of the Commission’s anti-subsidy investigation. In parallel, the EU and China continue to work hard to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission’s investigation, monitorable and enforceable.”

The EC probe into whether Chinese-made electric vehicles have a material benefit from state subsidies included BYD Company Limited (OTCPK:BYDDF), Geely Automobile (OTCPK:GELYF) (OTCPK:GELYY), state-owned SAIC, as well as non-Chinese automakers such as Tesla (TSLA), Renault SA (OTCPK:RNSDF), and BMW (OTCPK:BMWYY). Any tariff imposition could impact how Chinese electric vehicle makers such as NIO (NIO), XPeng (XPEV), and Li Auto (LI) approach expansion if tensions continue to rise between European regulators and Beijing.

The big picture

China is estimated to have overtaken Japan as the world’s largest auto exporter last year, and several Chinese auto brands have designs on increasing market share in Europe. Meanwhile, European car sales have been weak in 2024 and EV penetration rates have stalled.