EU cuts proposed tariffs on Tesla electric vehicles made in China

European Commission announced this AM that, in its ongoing findings of an anti-subsidy investigation into Chinese imports of battery electric vehicles, all Tesla vehicles imported from China will be subject to a 9% tariff. Tariffs proposed for other electric vehicle companies have been revised slightly ahead of what could become EU trade policy later this year.

Of all the proposed taxes on Chinese electric vehicles imported into the EU, Tesla looks to be the big winner and will pay the lowest rate of 9%. Reuters noted that the EU “set a new reduced rate of 9% for Tesla, lower than the 20.8% it indicated in July”.

As for MG maker SAIC Motor Corp., Geely, parent Volvo Car AB and BYD Co., each of companies face burdens of 36.3%, 19.3% and 17%, respectively.

Other cooperating companies would be subject to a 21.3% tariff, while non-cooperating companies would be subject to a 36.3% tariff. These rates would be on top of the current 10% tax that Chinese exporters face.

EU officials explained that Beijing’s apparent lack of subsidies for foreign-owned companies was a factor in calculating the tariffs.

The revised draft tariff decision burdens companies that manufacture electric vehicles in China and export them to Europe. The current tax is around 10%.

The charges are part of an anti-subsidy investigation launched earlier this year. Approximately 100 companies were investigated. The big finding included market-distorting subsidies throughout China’s electric vehicle supply chain.

The commission said electric vehicle companies subject to the proposed tariffs have ten days until August 30 to provide comments and request hearings. If a qualified majority of the EU votes in favor of the final regulation, the tariffs could become law by October 30 and remain in place for five years, with optional extensions after review.

Meanwhile, Brussels and Beijing have been locked in technical talks to find an alternative solution. Any solution would have to comply with the World Trade Organization.

“The EU is open to finding an alternative solution to the duty position that would be effective and compatible with the WTO (World Trade Organisation). It would align with WTO rules and provide a solution to the problems we find,” a senior EU official. he told him South China Morning Post.

The SCMP noted: “In other words: the ball is in Beijing’s court to come up with something that would have the same desired effect as the duties.”

Beijing has argued that the proposed tariffs are protectionist and has threatened trade retaliation. They threatened to impose duties on EU imports of luxury vehicles, engines, pork and spirits. Beijing is also challenging the proposed tariffs at the WTO.

Tesla is the big winner with the lowest fare.

By Zerohedge.com

More top reads from Oilprice.com