The European Commission has reduced tariffs it planned to levy on China-made Teslas, following the Elon Musk-owned electric vehicle-maker’s cooperation with EU officials in an ongoing subsidy probe into Chinese auto firms.
The Commission said it will now impose tariffs of 9% on China-made Tesla vehicles, down from an earlier 20.8%.
Some Chinese automakers in joint ventures with EU automakers may also receive lower punitive duties than previously indicated, the Commission said.
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EU officials have been probing Chinese EV-makers since last year over concerns that they were flooding the European market with cheap cars made with ‘unfair’ financial support from Beijing.
The probe came at a time when Chinese brands like Nio and BYD were digging their heels into Europe amid a slowdown in EV demand in China.
In July, the Commission laid out the findings of its probe and revealed it was imposing duties as high as 37.6% on EVs produced in China.
The tariffs are on top of the EU’s standard 10% duty on car imports.
Analysts argue, however, that even with the additional tariffs Chinese EVs will remain far cheaper than local rivals.
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Tesla factory visit
The rate revision for Tesla came after the EV giant requested the Commission recalculate its tariff rate based on the specific subsidies the company had received.
Last month, the carmaker hiked prices of its Model 3 cars in European countries including Germany, the Netherlands and Spain by about 1,500 euros ($1,622), citing new EU tariffs.
The Commission said it conducted an investigation, including sending a team to Tesla facilities in China, to verify what subsidies the firm had received.
Eventually, Brussels concluded that Tesla receives less subsidies from Beijing, compared to other Chinese EV producers, a Commission official said.
Smaller reprieves for China firms
An EU official said on Tuesday it still believed Chinese EV production had benefited from extensive subsidies.
The Commission has now proposed slightly lower final duties of up to 36.3% for companies that did not cooperate with the EU’s anti-subsidy investigation.
Chinese firms in joint ventures with EU producers may also be eligible for the lower duty rates planned for the Chinese company in which they are integrated – as opposed to automatically receiving the highest tariff rate, the Commission said.
It said on Tuesday the three companies it had sampled would each receive slightly lower provisional duties. For Chinese electric vehicle giant BYD, it said the rate was 17.0%, Geely 19.3% and SAIC 36.3%.
In July, the Commission set provisional duties of between 17.4% and 37.6% on top of the EU’s standard 10% duty on car imports. For BYD the additional rate was 17.4%, Geely 19.9% and SAIC 37.6%.
The rate is the highest for SAIC — a Chinese government and state-owned automaker — due its reluctance to cooperate with the investigation, the Commission has previously said.
Chinese carmakers have, meanwhile, called for retaliatory tariffs of 25% on European gasoline-powered car imports.
They have also accused European officials of using the probe as a means to “spy” on their tech by asking for “core secrets” such as battery composition, supplier information and other “business secrets.”
- Reuters, with additional inputs from Vishakha Saxena
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