Europe cuts tariffs on Tesla amid ongoing boycott

US electric car giant Tesla is benefiting from lower tariffs on its China-made models sold in Europe as the continent continues to struggle to protect its auto industry.

In June this year, the European Commission announced that it would impose tariffs of 17.4% to 38.1% on electric vehicles from China. Previously, the EU had imposed a 10% tariff on all imported cars.

Tesla’s Model 3 produced in China for delivery in Europe was initially subject to a 20.8% tariff, but this did not apply to the Model Y produced in Germany and the Model S and X produced in the United States.

CarExpert has hundreds of new car deals available right now. Let the experts help you get the best deal. Browse now.

However, following further investigation by the European Commission, Tesla’s tariff has been reduced to just 9.0%, but this is in addition to the existing 10% import tax.

according to ReutersTesla’s tariffs were reduced after the European Commission found that Tesla received lower subsidies from the Chinese government than other Chinese electric car manufacturers.

Tesla isn’t the only electric car maker to benefit from the tariff cuts, but it is by far the biggest beneficiary.

Geely, which owns the Volvo, Polestar and Lotus brands, will pay a 36.3 percent tariff on its electric vehicles, a slight reduction from the initial rate of 37.6 percent.

However, other brands have yet to make the same concessions, with SAIC (owner of MG and Maxus/LDV) facing a 38.1% tariff, while Chery, Great Wall Motors, Leapmotor, NIO, Xpeng and others all face tariffs between 20% and 21%.

Reuters European automakers that produce electric vehicles in China through joint ventures with local manufacturers are expected to receive tariff exemptions, the report said.

That includes BMW, which currently makes the electric Mini Cooper in China with Great Wall Motors and was initially subject to tariffs of 37.6 percent but later reduced to 21.3 percent, the newspaper reported.

Automakers will be able to continue to file objections to the current tariff rates until the end of August, with the tariffs set to fully take effect on October 30.

China has hit back at Europe after a Chinese government-run auto industry group recommended that China raise tariffs on imported internal combustion engine cars and SUVs with a displacement of more than 2.5 liters from 15% to 25%.

According to data from the China Passenger Car Information Association, the total number of such vehicles exported from Europe to China will reach 196,000 in 2023, an increase of 11% year-on-year.

Reuters In addition, German exports of cars and SUVs with a displacement of more than 2.5 litres to China were reportedly worth US$1.2 billion (A$1.77 billion) in 2023.

More: Is a trade war imminent? Chinese automakers want to impose counter-tariffs on Europe
More: China strikes back in tariff war with Europe and the U.S.
More: Europe’s influx of cheap electric cars sparks political conflict
More: Europe has the upper hand in China’s latest electric car tariffs
More: Germany: Tariffs on Chinese electric cars would make ‘everyone poorer’
More: US to impose high tariffs on Chinese electric vehicles