European Commission discloses draft duties on China-made battery electric vehicle imports
The European Commission (EC) unveiled on Tuesday its draft decision on definitive countervailing duties on battery electric vehicle (BEV) imports from China, Kallanish reports.
Carmakers received the proposed additional tariffs they will be subject to, and now have 10 days to provide comments. Interested parties can also request hearings with the EC “as soon as possible.”
The decision follows an anti-subsidy investigation officially started on 4 October 2023. Temporary duties, on top of the existing 10% import tariff, entered into force on 5 July 2024. If approved in an upcoming vote by member states, definitive countervailing duties will be imposed on 5 November for a five-year period.
Based on “substantiated comments” received from carmakers on the provisional measures, the EC has slightly adjusted the proposed rates downwards. They range from 17% to 36.3%, instead of the original maximum rate of 38.1%.
However, US EV maker Tesla has received a much lower rate than peers. This “individual duty rate” of 9% was granted as an exporter from China. This means Tesla’s BEV models shipped from its Shanghai gigafactory will only be subject to a total of 19% import duties “at this stage.”
In comparison, BYD vehicles are subject to 27%. Other cooperating companies, which the EC has not publicly disclosed, will face total tariffs of 31.3%. “Non-cooperating” companies such as SAIC, the parent company of MG Motors, are facing the harshest combined rate of 46.3%.
China Chamber of Commerce to the EU (CCCEU) expressed its “strong dissatisfaction and firm opposition to the EC’s protectionist approach.” The group argues the development of the European EV industry, along with the EC’s own report, “shows that there is no sufficient evidence to demonstrate that China’s BEVs cause substantial material injury in the EU market.”
“The EC’s unfair use of trade tools to hinder free trade in electric vehicles, along with this protectionist approach, will ultimately weaken the resilience of the European electric vehicle industry, disrupt the level playing field, and undermine the EU’s own green transition,” it adds.
The move will also exacerbate trade tensions between China and the EU, but the EC doesn’t see it impacting the ongoing procedures in the World Trade Organisation (WTO). Beijing says the EU has not followed WTO trade rules and has initiated a dispute consultation.
EU announces up to 38% import tariffs on China-made battery electric cars
The EU will slap import tariffs of up to 38.1% on battery electric cars made in China, after the European Commission’s anti-probe investigation confirms “unfair subsidisation.”
In a statement on Wednesday, the EC announced provisional countervailing duties that will be introduced from 4 July, if discussions with Chinese authorities don’t lead to an “effective solution.” The duties would be collected if and when definitive duties are imposed.
For now, carmakers and EU countries have been informed of different tariffs based on the EC’s calculations. These will be available for review, but member states can’t interfere with amounts. They will eventually be required to vote on the proposal. However, “measures can be imposed even if the qualified majority is not reached, provided the votes against do not reach a simple majority.”
The average weighted tariff for BEV producers in China cooperating with the probe is 21%. Those that didn’t cooperate, like China state-owned carmaker SAIC, would be subject to a 38.1% duty, the EC says.
Other disclosed individual sample duties include 17.4% for BYD and 20% for Geely, the latter is the parent company for a number of European brands including Volvo Cars, Polestar and Lotus.
“Following a substantiated request, one BEV producer in China – Tesla – may receive an individually calculated duty rate at the definitive stage,” the EC says, without elaborating.
Definitive measures are to be imposed by 12 October.
Reacting to the long-awaited announcement, European automotive trade body ACEA says that “free and fair trade is essential in creating a globally competitive European automotive industry.” It adds that healthy competition drives innovation and choice for consumers, while emphasising that what the European auto sector needs “above all else is a robust industrial strategy for electromobility.”
“The tariffs are welcome but Europe needs a strong industrial policy to speed up electrification and localise manufacturing.” adds Julia Poliscanova, senior director for vehicles and emobility supply chains at T&E. “Just introducing tariffs while scrapping the 2035 deadline for polluting cars would slow down the transition and be self-defeating.”
The campaign group said in March that one in four BEVs sold in Europe this year could be imported from China, led by European carmakers with production in Asia. The trend is set to reverse in the period up to 2027.
On 11 June, China’s foreign ministry spokesman Jian Lin said Beijing urges the EU to terminate the investigation as soon as possible to avoid damaging China-EU economic and trade cooperation, as well as the stability of supply chains. “If the EU insists on its own way, China will never sit idly by and will take all necessary measures to resolutely safeguard its legitimate rights and interests,” Lin added.
Currently, BEVs imported from China are subject to a 10% duty in the EU. European BEVs face a 15% import tariff in China.
