The European Union’s (EU) set date of July 4 to implement new tariffs on electric vehicles (EVs) imported from China has arrived. As the EV market has reached this date, the EU will impose tariffs ranging from 17.4% to 37.6% on Chinese EVs starting Friday.

Previously, the European Commission, led by President Ursula von der Leyen, justified the decision by citing concerns over the rapid growth of Chinese EV imports, which have surged from a 3.9% market share in 2020 to 25% by September 2023. All this led to the investigation of allegations of anti-competitive subsidies benefiting Chinese automakers and now also led to the new tariffs being implemented today.

In regards to the new tariff rates on Chinese EVs, there will be specific tariffs affecting certain Chinese automakers differently: 

These new tariff rates will also come on top of the existing 10% duty on vehicle imports to the EU. Western automakers with production facilities in China including Tesla and BMW, will face a 20.8% tariff.

In terms of the new tariff rates, the only notable difference was the cut from 38.1% to 37.6% rate. Furthermore, the mixed reactions have some standing out with German automakers expressing concerns about potential retaliation from China and the impact on global supply chains.

Volkswagen criticized the move stating, “The negative effects of this decision outweigh any benefits for the European and especially the German automotive industry.”

As for the Chinese government, it responded strongly to the EU’s decision, with the Commerce Ministry calling it “a naked act of protectionism,” with hints at possible retaliatory measures.

As of now, these tariffs will be in place for four months, during which intensive negotiations between the EU and China are expected to continue. A final decision on definitive duties, which could last for five years, will be made by November 2, subject to a vote by EU member states.

Read More: EU and China Enter Negotiations On Chinese EV Tariffs

With the ongoing trend of tariffs being raised upon Chinese EVs, the one that made the most notable difference was the United States (U.S.) with the increase of tariffs from 25% to 100%. The results of this new tariff rate arrives the same with perception of Chinese EVs becoming more affordable and competitive that makes American-made EVs hard to compete.

The U.S. trade partner, Canada, has also done the same of with the action of a 30-day consultation period on consideration to implement tariffs on Chinese EVs. As a result, these major nations taking action on raising tariffs on Chinese EVs will signal a hard hit onto the Chinese EV industry.

However, EU officials stress that their goal is not to block Chinese EVs entirely but to level the playing field while still maintaining affordable electric vehicle options for European consumers.

As the global race for EV market dominance intensifies, this latest development underlines the complex interplay between trade policies, environmental goals, and industrial strategies. The coming months will be significant in determining the long-term impact on the automotive industry and EU-China trade relations.

Want to learn more about EV? Thinking of buying an EV? Head over to EV.com and discover more.

EV.com is the world’s 1st Electric Vehicle (EV) marketplace that aims to promote zero-emission mobility by providing a platform for consumers to learn about, compare, and purchase EVs.