The additional tariff planned for Tesla will be reduced to 7.8 percent from the previous 9 percent, the EU Commission announced on Tuesday, confirming a Reuters report. For the Chinese carmaker Geely, the new rate is 18.8 percent instead of 19.3 percent.
However, the 17 percent tariff surcharge will remain for competitor BYD. A top rate of 35.3 percent will apply to SAIC and other companies that do not cooperate with the EU. The punitive tariffs are in addition to the normal EU import tariffs of ten percent for cars.
China signaled willingness to talk
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China has since reiterated its willingness to hold talks with the EU Commission to address economic and trade conflicts and mitigate the threatened punitive tariffs on electric cars made in China. “China is willing to continue to work closely with the European side to find a solution that meets the common interests of both sides and is in line with WTO rules,” the Ministry of Commerce said in a statement. Last week, China signaled its willingness to ease tensions and refrain from imposing provisional anti-dumping measures on EU brandy.
Last month, the EU presented its first proposal for definitive tariffs. China and the companies concerned had ten days to submit their comments, which the Commission took into account when setting the revised tariff rates. The 27 EU states must vote on the definitive tariffs. They will be implemented unless a qualified majority of 15 EU member states, representing 65 percent of the EU population, vote against them. This is a high hurdle that is rarely achieved.
The tariffs also affect the electric car production of European manufacturers in China, the most important sales market for German carmakers. They are also worried that China will respond with tariff increases.
ePaper
How will the reduction in tariff rates affect Tesla’s competitiveness in the European market?
EU Lowers Proposed Tariff Rates for Tesla and Other Chinese EV Imports
In a recent development, the European Union (EU) has announced a reduction in proposed tariff rates for Tesla and other Chinese electric vehicle (EV) imports. According to reports, Tesla’s tariff rate will be revised to 7.8%, down from the initial 9% proposed rate [[3]]. Similarly, Geely’s tariff rate will be lowered to 18.8% from 19.3% [[1]].
However, not all Chinese EV manufacturers will benefit from the reduced tariff rates. BYD, a competitor to Tesla, will continue to face a 17% tariff surcharge [[2]]. Additionally, companies that do not cooperate with the EU will be subject to a top rate of 35.3% [[1]].
These punitive tariffs are in addition to the normal EU import tariffs of 10% for cars. The EU had presented its first proposal for definitive tariffs last month, and China and the companies concerned had ten days to submit their comments [[2]]. The EU Commission took these comments into account when setting the revised tariff rates.
China Signals Willingness to Talk
In response to the proposed tariffs, China has reiterated its willingness to hold talks with the EU Commission to address economic and trade conflicts and mitigate the threatened punitive tariffs on electric cars made in China. In a statement, the Ministry of Commerce said, “China is willing to continue to work closely with the European side to find a solution that meets the common interests of both sides and is in line with WTO rules” [[1]].
Last week, China signaled its willingness to ease tensions and refrain from imposing provisional anti-dumping measures on EU brandy [[1]]. The EU and China have been engaged in a trade dispute, with the EU accusing China of subsidizing its electric vehicle industry.
Impact on European Manufacturers
The tariffs will not only affect Chinese EV manufacturers but also European manufacturers that produce electric cars in China, which is the largest sales market for German carmakers. European manufacturers are worried that China will respond with tariff increases, further exacerbating the trade tensions between the two regions [[1]].
The 27 EU states must vote on the definitive tariffs, which will be implemented unless a qualified majority of 15 EU member states, representing 65% of the EU population, vote against them. This is a high hurdle that is rarely achieved.
The reduction in proposed tariff rates is a positive development for Tesla and other Chinese EV manufacturers, but the trade tensions between the EU and China are far from resolved. As the situation continues to evolve, it remains to be seen how the two regions will navigate the complex issues surrounding electric vehicle trade.
**Questions:**
EU Lowers Tariffs on Tesla and Other China-Built EVs: A Boost to Electric Vehicle Market
The European Commission has announced a reduction in tariffs on Tesla and other China-built electric vehicles (EVs), signaling a significant development in the electric vehicle market. The move is expected to benefit Tesla, Geely, and other Chinese EV manufacturers, making their products more competitive in the European market.
Tariff Reduction: A Win for Tesla
According to reports, Tesla’s proposed tariff rate will drop to 7.8% from the previous 9% [1[1]. This reduction will make Tesla’s EVs more affordable for European consumers, increasing the company’s competitiveness in the region. The company is expected to benefit from this decision, which could lead to increased sales and revenue.
Geely and BYD: Different Fates
For Geely, the new tariff rate is 18.8% instead of 19.3%, while BYD will continue to face a 17% tariff surcharge [2[2]. SAIC and other companies that do not cooperate with the EU will face a top rate of 35.3%. The punitive tariffs are in addition to the normal EU import tariffs of 10% for cars.
China’s Response
China has reiterated its willingness to hold talks with the EU Commission to address economic and trade conflicts and mitigate the threatened punitive tariffs on electric cars made in China [3[3]. The Ministry of Commerce stated, “China is willing to continue to work closely with the European side to find a solution that meets the common interests of both sides and is in line with WTO rules.”
Impact on European EV Market
The reduction in tariff rates is expected to affect the electric car production of European manufacturers in China, the most important sales market for German carmakers. European manufacturers are also worried that China will respond with tariff increases, which could impact their business.
Conclusion
The EU’s decision to lower tariffs on Tesla and other China-built EVs is a significant development in the electric vehicle market. The reduced tariffs will make EVs more competitive in the European market, benefiting consumers and manufacturers alike. As the global EV market continues to grow, this move is expected to have a positive impact on the industry’s development.
References
[1] Europe Autonews. (2024). EU said to lower import tariffs on Teslas, other China-built EVs. Retrieved from
[2] Teslarati. (2024). Tesla’s EU tariffs for China-made EV imports expected to drop below 8%. Retrieved from
[3] Swissinfo. (2024). EU to lower proposed tariffs on Tesla, other EVs from China. Retrieved from
