Tesla could get special duties as part of higher China EV tariffs, EU says

Tesla could be hit with a specially calculated duty on its cars produced in China and imported to Europe as part of of the European Union’s decision to raise tariffs on Chinese electric vehicles.

On Wednesday, the European Commission, the EU’s executive arm, imposed higher tariffs on Chinese EV makers of up to 38%. These provisional dutiies will come into effect from July 4 if the EU does not reach a solution with Chinese authorities. Four months after this, so-called “definitive measures” take place.

At this stage, Tesla “may receive an individually calculated duty rate,” the Commission said.

Valdis Dombrovskis, the EU commissioner for trade, told CNBC on Wednesday that Tesla was making the case for lower tariff rates, which the commission was examining.

“We can also look more in depth in a specific situation of Tesla and subsidies [that] Tesla has specifically received in China, and that may lead indeed to different level of countervailing duties,” he said.

Shanghai, China is home to one of Tesla’s biggest Gigafactories. In 2023, Tesla delivered 947,000 vehicles from its Shanghai factory with 600,000 going to the China market and the rest exported, according to Chinese state media.

Europe’s moves follow the U.S. where the administration of President Joe Biden last month slapped 100% tariffs on Chinese electric cars.

Tesla CEO Elon Musk recently addressed those U.S. tariffs.

“Neither Tesla nor I asked for these tariffs,” Musk said in May.

“Tesla competes quite well in the market in China with no tariffs and no deferential support,” Musk added. “I’m in favor of no tariffs.”