EU Confirms Tariffs on Chinese-Made EVs

By David Sachs

The European Union confirmed plans to impose additional tariffs on electric cars made in China, dashing hopes of a solution sought by several carmakers whose executives fear reprisal from an escalating trade war.

New import fees will begin Friday and last at least four months, the EU Commission said. Thursday's confirmation comes after negotiations with the Chinese government and lobbying from the German car industry and others failed to halt the tariffs.

The EU Commission last month said the Chinese government unfairly subsidizes EV companies--including European carmakers who import EVs to Europe--at a level that undercuts competition. Subsidies let carmakers in China sell EVs for less than European-made vehicles, prompting the tariffs to protect the industry.

European carmakers including Volkswagen, BMW, Mercedes-Benz, and Stellantis face pricing and market-share pressure in China from homegrown manufacturers like BYD and Geely, which also have growth plans in Europe.

But German car giant Volkswagen and others have come out against the fees for fear of an escalating trade war, saying the tariffs could hurt Europe's industry long-term.

The duties range between 17.4% and 37.6%--on top of a pre-existing 10% tariff--depending on imports, subsidies, and cooperation with the investigation. BYD, Geely, and SAIC will be subject to new tariffs of 17.4%, 19.9%, and 37.6%, respectively.

Several carmakers will be subject to new tariffs of 20.8%, the weighted average. Tesla, which said it might raise prices because of the fees, could receive a customized rate. The decision will be made if and when the tariffs become definitive in November, the EU said, after which point they would be in effect for five years.

Overall, tariff rates will be slightly lower than previously announced for some carmakers, the EU Commission said. The executive branch revised the duties after affected companies provided more information to the EU Commission following its investigation.

Write to David Sachs at david.sachs@wsj.com

(END) Dow Jones Newswires

July 04, 2024 08:05 ET (12:05 GMT)

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