The European Union confirmed that from Wednesday the tariff hikes for several Chinese manufacturers of electric vehicles (EVs) will enter into effect, after concluding its investigation on unfair state aid given to these companies.
New import duties vary per companies and they will be on top of the standard 10% car import duty. SAIC and other companies that the EU deemed uncooperative with the investigation will see their duties spiking up 35.3%. BYD’s new import duty sits at 17%, Geely’s at 18.8%. Other companies that cooperated with the EU received a 20.7%. Tesla received a hike of 7.8% for its Chinese-made EVs, after asking for an individual evaluation from the EU.
The EU decided in July to hike tariffs, prompting China to launch an asymmetrical response with probes on EU imports of brandy, dairy and pork products. Beijing also decided to bring the new tariffs before the World Trade Organization and accused the EU of protectionism.
“We welcome competition, including in the electric vehicle sector, but it must be underpinned by fairness and a level playing field,” said Executive Vice-President and Commissioner for Trade Valdis Dombrovskis who added that in adopting the new tariffs “we’re standing up for fair market practices and for the European industrial base.”
The EU decided to check on Chinese EVs producers as their share of the European car market rose in the past years from 1% in 2019 to 8% in 2024. According to the Commission, Chinese EVs are usually around 20% cheaper than EU-made models. The investigation concluded that those lower prices are due to unfair subsidies from the Chinese government. The Commission mentioned preferential financing and grants plus land, batteries and raw materials granted at below market prices.
Despite the findings and its long-term harm to EU car production, not every member state was in favour of higher import duties. Chiefly, Germany and four other states opposed the new tariffs in a vote, where the decision was backed by ten other member states with 12 abstentions.
Germany’s economy ministry commented that they support negotiations on the issue and would prefer a diplomatic resolution. German carmakers were always against the EU new tariffs, fearing retaliation in the form of tariffs for their cars in China, one of their key overseas markets. On the other side of the debate, France’s PFA car association approved of the new tariffs.
The Commission is still in talks with China over the issue and it is open to further talks even after tariffs were confirmed.
