As anticipated, Tesla will also be affected by the new European tariffs on cars produced in China, as some of the Model 3 units sold in Europe are manufactured at the Shanghai Gigafactory. The European Commission has completed the final draft, which appears to favor the Californian brand with “only” 9% in additional tariffs, significantly lower than those imposed on other Chinese automakers.
The document delivered by the Commission includes all the conclusions from the anti-dumping investigation that was launched almost a year ago, following concerns from manufacturers about the influx of cheap Chinese electric cars. Some of these manufacturers, like Stellantis, now criticize the tariffs even though they initially requested the investigation to penalize unfair competition. Nevertheless, the tariffs have been finalized and are already impacting the market.
The Final Tariffs
As mentioned, Tesla’s tariffs are lower. However, the percentages have been slightly adjusted for everyone, albeit marginally. The tariffs for BYD have been reduced from 17.4% to 17%, for Geely (including some Volvo and Polestar models) from 19.9% to 19.3%, while the highest tariffs remain for Saic, which decreased from 37.6% to 36.3%. This adjustment is no coincidence, given MG’s rise in the electric vehicle market, which is controlled by Saic, thanks to the success of the MG4, which could be significantly affected by these tariffs.
These tariffs are in addition to the existing 10% tax, and the Commission calculated them based on the level of cooperation each manufacturer provided during the investigation. For this reason, Saic’s 36.3% represents the maximum penalty for companies that did not cooperate at all. For all other companies, the tariffs are set at 21.3%.
The EU has also included a provision that allows for lower tariff rates if Chinese manufacturers enter into joint ventures with EU-based companies, such as the partnerships between Leapmotor and Stellantis or Volkswagen and Xpeng. However, this clause only applies to manufacturers that were not yet exporting at the time the investigation began, like the two mentioned.
It should be noted that these tariffs are not yet in effect. The draft has been published, and the interested parties have 10 days to comment and provide feedback. Once the Commission has reviewed all the feedback from the manufacturers, the tariffs will be put to a vote by the Member States, and if approved, will be valid for five years. The final tariffs must be imposed no later than four months after the provisional ones, which have been in effect since July 5, 2024.
