EU Slashes Tariffs on Tesla’s China-Made Cars, Offering Competitive Edge
The European Union has significantly reduced tariffs on Tesla vehicles manufactured in China, a move that could enhance the automaker’s market position in the region. The new tariff rate, announced by the European Commission, is set at 9%, a sharp decrease from the initial 20.8% rate imposed earlier this year.
This adjustment follows the EU’s recent decision to increase tariffs on all electric vehicles (EVs) imported from China due to concerns about “unfair” state subsidies that allegedly gave Chinese electric vehicle producers an advantage over European competitors. Tesla, which operates a factory near Berlin but exports many vehicles from China to Europe, had lobbied for a reassessment of its tariff rate.
The reduced tariff applies on top of the existing 10% duty on all EV imports, making Tesla’s total tariff significantly lower compared to the 17% to 36.3% rates imposed on other Chinese automakers. The European Commission indicated that this new rate reflects the specific level of subsidies Tesla received in China.
Gregor Sebastian, a senior analyst at Rhodium Group, expressed surprise at the relatively low additional tariff for Tesla. He noted the subsidies received by Tesla, including local government loans and subsidized batteries, but acknowledged the complexity of the tariff-setting process.
The revised rate may provide Tesla with a competitive advantage over other Chinese carmakers like SAIC, which faces a 36.3% tariff, and Geely, which is subject to a 19.3% tariff. BYD, another major Chinese EV manufacturer, is facing a 17% additional tariff but has not yet adjusted its prices in Europe.
Despite the tariff reductions, the European market remains crucial for Chinese EV manufacturers, who have enjoyed substantial profits there. Analysts suggest that the reduced tariffs will help Tesla maintain its competitive edge in the European market, where it faces stiff competition from other Chinese-made EVs.
