EU to impose new tariffs of up to 38% on Chinese electric vehicles

BRUSSELS -- The European Commission notified automakers on Wednesday that it would apply additional duties of up to 38.1 percent on imported Chinese electric vehicles starting next month.

The Commission said it would set tariffs of 38.1 percent for MG-owner SAIC, 20 percent for Geely and 17.4 percent for BYD.

The Commission will apply rates of 21 percent for companies it says have cooperated with its anti-subsidy investigation and of 38.1 percent for those it said had not.

Tesla may receive an individually calculated duty rate at the definitive stage, the Commission said in a statement.

The new tariffs will come on top of the existing EU tariff of 10 percent, which means that SAIC and other companies facing the highest additional tariff of 38.1 percent will end up paying 48.1 percent on their EVs exported to Europe.

Western producers such as Tesla and BMW that export cars from China to Europe were considered cooperating companies.

Tesla ships the Model 3 from Shanghai to Europe, while BMW exports the iX3 electric SUV and electric models from its Mini brand. Mercedes-Benz builds Smart electric cars in China and Renault's Dacia Spring electric minicar is made in China. Volvo exports the EX30 electric SUV to Europe from China.

The EU provisional duties are set to apply by July, with the anti-subsidy investigation set to continue until Nov. 2, when definitive duties, typically for five years, could apply.

Margaritis Schinas, a Commission vice president, said that Chinese-built cars were benefiting from unfair levels of subsidies, threatening EU producers.

"On this basis the Commission has reached out to Chinese authorities to discuss these findings and explore possible ways for resolving the issues identified," he told a news conference.

The indicative tariffs are above expectations of analysts of between 10 percent and 25 percent on Chinese EVs.

The move comes as European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals.

China has rebuked the EU over the anti-subsidy investigation, urged cooperation and lobbied individual EU countries, but not fully spelt out what its response to tariffs would be.

The EU imported about 440,000 EVs from China in the 12 months ending in April, which were worth €9 billion or around 4 percent of household expenditure on vehicles.