The European Union (EU) has proposed a tax hike of 38 percent on Battery Electric Vehicles (BEVs) made by Chinese carmakers, including Tesla. The proposed tariff hike of 38 percent is over the 10 percent duties currently being charged. The EU says that the new tariff will be effective July 2024.
The European Commission stated, “Provisionally concluded that the battery electric vehicles value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.”
As per the new proposition, China’s BYD will see a tariff of 17.4 percent, Geely will attract 20 percent, and state-owned SIAC will see a 38.1 percent tax. The commission stated, “Following a substantiated request, Tesla may receive an individually calculated duty rate at the definitive stage.”
A big relief for carmakers is that the new tariff won’t affect hybrids, which comes as a relief for BYD, which sells BEVs and Plug-in Hybrids. The carmaker also has plans to build a factory in Hungary, but it will not be ready and functional till 2027. BYD’s Thailand factory will be functional from June 30, while its setup in Brazil will be ready in early 2025.
Other carmakers such as Nio and XPeng sell vehicles in Europe, but their numbers are small and have no plans to build a factory in Europe. Germany, Sweden and Hungary have objected to the new tariffs, however, 11 more countries are needed for the EU Commission to overturn the rule.
China has responded to the EU’s decision, as reported by news agency Xinhua. “In light of their economic structure and sheer size, China and the EU are best served by teaming up on major economic and trade issues. It would be more cost-effective for the EU to draw on China’s advantages in order to develop its own EV industry,” reported Xinhua.
