Teslas made in China will face lower EU tariffs than rivals after Brussels bowed to pressure from Elon Musk’s car company.
Electric cars made at Tesla’s Shanghai plant will be subjected to a 9pc import tariff, European Commission officials confirmed. That is less than half the import tax of 20.8pc that was initially proposed.
The rate has been lowered after push back from Mr Musk’s company. Tesla had requested its tariff rate be recalculated, based on the specific subsidies it had received from China.
The European Commission said officials had visited the company’s facilities in China in June and said Tesla’s submission had “been under thorough examination”.
The EU is imposing tariffs on Chinese-made EVs amid a trade dispute between the bloc and China. European officials have accused Beijing of unfairly subsidising local manufacturers and flooding the EU with artificially cheap EVs.
Tesla’s tariff will be lower than Chinese competitors but also rival European carmakers that produce EVs in China such as Volkswagen, which has joint venture deals with carmakers JAC and SAIC.
The European Commission launched an anti-subsidy investigation into China’s electric car sector last October, warning that cheap imports created a “threat of economic injury” to the continent.
The investigation was launched as Chinese car companies such as BYD and Geely began aggressively expanding across Europe.
The Kiel Institute for the World Economy has estimated that Beijing provided more than £5bn in subsidies to electric car companies in 2022 alone, the vast majority of this going to BYD.
In a report, the institute claimed: “Combined with other support measures… Chinese companies have rapidly expanded in various green technology sectors, dominating the Chinese market and increasingly penetrating EU markets.”
In a draft decision, the EU said it would hit BYD, one of the world’s largest electric carmakers, with new duties of 17pc. Geely, which owns Volvo and the Chinese electric car brand Zeekr, will face tariffs of 19.3pc. Chinese state-owned SAIC will see tariffs of 36.3pc.
Tesla has deep ties with China and is by far the largest exporter from the country to Europe. Its Shanghai gigafactory, which opened in 2019, is the company’s largest outside the US and has produced more than 2m electric vehicles.
Mr Musk has been careful to foster cordial relations with Beijing, meeting Li Qiang, the Chinese premier, earlier this year on a surprise visit and praising the country’s adoption of electric cars.
The billionaire has avoided criticism of the Chinese state and called for closer ties between Beijing and the US.
China previously forced foreign carmakers into joint ventures with local companies when launching in the market. However, Tesla was granted permission to retain full ownership of its factory.
Mr Musk’s relationship with the EU has been somewhat stormier recently. The decision to cut Tesla’s tariff comes despite EU officials repeatedly clashing with Mr Musk over his approach to online safety at X, formerly Twitter, which the billionaire also controls.
Sales of Tesla’s cars, which include the Model 3 and Model Y, have been under pressure as demand for new EVs stalls around the world. The US carmaker delivered 444,000 cars in the three months to the end of June, down 5pc on the same period in 2023.
Source Agencies
