EU Lowers Tariffs on Chinese Tesla Cars

The European Union has significantly reduced tariffs on Tesla vehicles produced in China, potentially boosting the company’s sales in Europe. The European Commission has lowered the additional tariff on Tesla’s China-made vehicles from 20.8% to 9%. This new rate is in addition to the standard 10% duty on all electric vehicle (EV) imports.

The reduction follows the EU’s decision in July to increase tariffs on all Chinese EVs due to concerns about unfair state subsidies in China affecting European manufacturers. Tesla, which produces many of its vehicles in China for export to Europe, had requested a review of its tariff rate.

Analysts suggest that the reduced tariff on Tesla’s vehicles could help the company stay competitive against other Chinese EVs in Europe. Previously, Tesla had raised the price of its Model 3 by about 4% in response to the higher tariffs, but the new rate could help offset these costs. According to CNN, the European Commission’s decision reflects the level of state subsidies Tesla received in China, as verified during a recent visit to China, similar to checks done for other Chinese automakers.

In contrast, other Chinese automakers face higher additional tariffs. SAIC, owner of the MG brand, faces a 36.3% tariff, while Geely, which owns Volvo, is subject to a 19.3% tariff. BYD, a major competitor to Tesla, faces a 17% additional duty. These rates are slightly lower than those initially proposed in June.