European Union imposes definitive countervailing duties on China-made electric vehicles

29 October 2024

The European Commission imposed definitive countervailing duties on imports of battery electric vehicles (BEV) from China for a period of five years. The EU investigation found that the BEV value chain in China benefits from unfair subsidization which is causing threat of economic injury to EU producers of BEVs, EU Commission said in a press release. The duties will enter into force on the day following publication in the Official Journal.

In parallel, the EU and China continue to work towards finding alternative, WTO-compatible solutions to address the problems identified by the investigation. The Commission also said it remains open to negotiating price undertakings with individual exporters, as is permitted under EU and WTO rules.

Chinese BEV exporting producers will be subject to the following tariffs:

• Companies which cooperated with the EU investigation:
  • BYD: 17.0%
  • Geely: 18.8%
  • SAIC: 35.3%
  • Tesla: 7.8%
  • Other cooperating companies: 20.7%
• Companies which have not cooperated with the EU investigation: 35.3%

The above tariffs are on top of the EU’s standard 10% import duty for cars.

Definitive duties will be collected as of entry into force. The provisional duties imposed on imports of BEVs from China on 4 July 2024 will not be collected.

The decision follows the approval of the tariffs on China-made BEVs by the EU Member States on October 3^rd. In the vote, 10 EU members (including Italy, France, and Poland) backed tariffs while 5 (including Germany and Hungary) voted against, with 12 abstentions.

German automakers have been ambiguous about the tariffs, fearing the effects of escalating trade conflict with China on their business. BMW urged the EU and China to avert tariffs through a negotiated deal. “Today’s vote is a fatal signal for the European automotive industry. What is needed now is a quick settlement between the EU Commission and China to prevent a trade conflict from which no one gains,” BMW CEO Oliver Zipse said after the EU Council approved the duties.

According to a report by Reuters, Chinese automakers including BYD, SAIC, and Geely were told at a meeting held by the Chinese Ministry of Commerce on October 10^th that they should pause their heavy asset investment plans such as factories in countries that backed the tariffs.

Source: EU Commission