On October 29, the European Commission announced that it had concluded its anti-subsidy investigation into Chinese electric vehicles and decided to impose a five-year final tariff on pure electric vehicles imported from China. This decision, published in the EU Official Gazette on October 29, local time, means that the final tariffs will officially take effect on October 30.
The EU disclosed the final tariff levels for Chinese-made electric vehicles. BYD, Geely, and SAIC, which cooperated in the sampling survey, will face tariffs of 17.0%, 18.8%, and 35.3%, respectively.
Additionally, a 20.7% tariff will be applied to Chinese electric vehicle manufacturers that cooperated with the EU investigation but were not part of the sample group.
A 35.3% tariff will be imposed on other Chinese electric vehicle manufacturers that did not cooperate with the investigation.
After demonstrating sufficient grounds to request a separate review, Tesla's China-produced electric vehicles will face a 7.8% tariff.
The EU will officially implement these tariffs from the effective date, and it decided not to impose the previously announced provisional tariffs on Chinese electric vehicles from July 4, 2024.
Going forward, the European Commission will continue to monitor the effectiveness of the current tariff measures, including efforts to prevent circumvention of these tariffs.
Any automobile export manufacturer cooperating with the EU investigation has the right to request an accelerated review to determine its individual tariff rate.
These tariff measures will expire after five years, unless a review is initiated before the end of that period.
If an importer believes its automobile exporting manufacturer has not received subsidies, or that the subsidies are less than the tax paid by the importer, it may request a tax refund by providing sufficient justification and corresponding evidence.
Meanwhile, the EU and China are actively seeking alternative solutions to the tariffs under WTO regulations to effectively offset the impact of Chinese subsidies. The European Commission is also open to negotiating price commitments separately with automobile exporters, following EU and WTO rules.
To date, the European Commission has held eight rounds of technical negotiations with China to explore alternatives to tariffs, and has indicated that negotiations can continue after the final tariffs are imposed. Both parties are exploring possible minimum price commitments for imported vehicles, and while the European Commission stated that "significant differences remain," both sides agreed to hold further negotiations.
"The EU remains a global leader in open, fair, and rules-based trade," said Valdis Dombrovskis, Executive Vice President and Trade Commissioner of the European Commission. "We welcome competition, including in the field of electric vehicles, but this competition must be based on a level playing field. After rigorous investigation, we have taken these moderate and targeted measures to defend fair market practices and Europe's industrial base. At the same time, we remain open to possible effective alternatives."
Currently, European automakers are dealing with a significant influx of low-cost electric vehicles from Chinese competitors. The European Commission estimates that Chinese auto brands' market share in Europe has risen from less than 1% in 2019 to 8%, and may reach 15% by 2025. The European Commission also noted that Chinese-made electric vehicles are generally sold at prices 20% lower than those made in the EU.
However, data from the China Passenger Car Association (CPCA) showed that, in the first three quarters of this year, China's electric vehicle exports to the EU fell by 7% year-on-year. Yet, in August and September, just before the EU's final tariffs on Chinese electric vehicles took effect, China's electric vehicle exports to the EU surged by more than 33% year-on-year.