The European Commission has revised its proposed tariff rates on Chinese electric vehicles (EVs) imported into the European Union (EU), offering a reprieve to major automakers including Tesla and BYD. 

According to the European Commission, there are now new adjustments for the tariff rates on Chinese EVs as they now range from 9% to 36.3%, down from the initial 17.4% to 38.1% proposed in June 2024. Notably, Tesla got the biggest win in this adjustment as its tariff rate dramatically reduced from 20.8% to just 9%. This rate will be applied on top of the existing 10% tariff on car imports, resulting in a total 19% duty for Tesla’s Chinese EVs entering the EU market.

As for BYD, it saw a slight reduction in its tariff rate, from 17.4% to 17%. Other automakers affected include Geely whose rate dropped from 20% to 19.3%, and SAIC, which faces the highest rate at 36.3%, down from 38.1%. All other cooperating companies will be subject to a 21.3% tariff rate, a slight increase from the 21% proposed in June.

In a notable development, the European Commission has also introduced a provision for Chinese car manufacturers and joint ventures with EU producers that have not yet exported to the EU. These companies will be classified as “cooperating companies” and face a special duty of 21.3% if they decide to enter the EU market in the future.

Here is a breakdown of the new tariff rates from the European Commission for Chinese EVs: 

The European Commission emphasized that these rates are not final and may still be subject to change. Moreover, automakers have been given ten days to provide feedback and can request hearings with the Commission. 

The investigation, initiated in October 2023 following concerns about the rapid increase of low-priced Chinese EV exports to the EU, is set to conclude within 13 months of its start. If approved, the special duties would remain in effect for five years, with the possibility of extension upon review.

Read More: EU and China Enter New Negotiation Discussions On Chinese EV Tariffs

As this move from the EU reflects its attempt to balance protecting its domestic automotive landscape while maintaining trade relations with China, the terms of changes based on the outcome of this latest development will be determined as the competitive landscape of its EV market continues to intensify. The final decision is projected to be published in the Official Journal of the European Union by October 30, 2024, following a vote by EU Member States.

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