Tesla is poised to benefit from a reduced tariff on its China-manufactured electric vehicles exported to the European Union (EU), following revisions by the European Commission.
The new draft findings, part of the EU’s high-profile investigation into alleged Chinese subsidies, have lowered the proposed punitive duty on Tesla’s exports from 20.8 percent to 9 percent, Reuters news report said.
This investigation, which has stirred tensions with Beijing, seeks to address what the EU claims are unfair subsidies provided to Chinese electric vehicle (EV) manufacturers. The Commission has argued that these tariffs are necessary to create a level playing field for EU automakers.
Tesla had requested a reassessment of its tariff rate based on the specific subsidies it received from the Chinese government. The Commission’s review confirmed that Tesla received fewer subsidies compared to other Chinese EV makers, resulting in the lower tariff rate. Despite this adjustment, the Commission maintained that Chinese EV production had benefited significantly from state support, justifying final duties as high as 36.3 percent for non-cooperative companies.
The Commission also adjusted the tariff rates for other companies involved in the investigation. Chinese EV giant BYD is now facing a duty of 17 percent, Geely 19.3 percent, and SAIC 36.3 percent. These rates are slightly lower than the provisional tariffs set in July.
The proposed tariffs, which are on top of the EU’s standard 10 percent duty on car imports, are still under review, with the final decision expected by the end of October. Interested parties have until August 30 to submit comments on the findings. The final duties will require approval from a qualified majority of the EU’s 27 member states. If implemented, these duties would typically remain in effect for five years.
Meanwhile, China has already initiated a challenge to the EU’s actions at the World Trade Organization.