In an effort to protect its automotive industry and ensure fair competition, the European Union (EU) introduced new tariffs on imported electric vehicles (EVs) from China. These tariffs, which came into effect on October 30, 2024, target vehicles believed to benefit from state subsidies that give them an unfair advantage in the European market. The EU’s investigation revealed significant undercutting of local manufacturers by Chinese automakers, threatening the competitiveness of European legacy carmakers. Prior to this move, the EU already imposed a standard 10% tariff on imported vehicles, but the new measures add a variable surcharge specifically aimed at EVs. The level of these tariffs varies widely, depending on how well producers cooperated in the anti-subsidy investigation and the level of subsidies received from China. The definitive measures will remain in force for a period of five years, raising the total maximum tariff rate to 45.3% when combined with the standard 10% duty.
Table of Contents
- BYD – 27%
- Geely – 28.8%
- SAIC – 45.3%
- All Other Manufacturers (Xpeng, Nio, Zeekr…) – 30.8%
- Tesla – 17.8%
- A Real Reason For Tariffs on Chinese Electric Vehicles
BYD – 27%
BYD, the largest Chinese EV manufacturer exporting to Europe, faces a 17% tariff on its vehicles. When combined with the standard 10% tariff on cars imported into the EU, the total tariff rate for BYD amounts to 27%.
The EU’s investigation highlighted that BYD benefits from extensive subsidies, including direct financial grants, tax exemptions, and government-supported research and development programs. These measures have enabled BYD to price its EVs significantly lower than competitors, aiming for a strong foothold in markets like Germany and France. The tariff level reflects the degree of cooperation BYD provided during the investigation.
Geely – 28.8%
Geely, which owns several international brands like Volvo and Polestar, is subject to tariffs of 18.8% (28.8% total). While Geely’s Chinese-manufactured EVs benefit from state subsidies, the company’s ownership of European brands complicated the tariff assessment. The EU opted for this tariff level to address the competitive edge provided by Chinese subsidies while acknowledging Geely’s significant investments in Europe.
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SAIC – 45.3%
SAIC Motor, the parent company of MG, faces the highest tariff rate of 35.3% (45.3% in total). This rate applies to companies that either did not cooperate with the EU’s investigation or were found to receive the highest levels of subsidies. Known for reviving the MG brand in Europe, SAIC benefits from extensive government-backed loans and tax incentives that significantly reduce production costs. The EU’s decision to impose the maximum tariff on SAIC aims to offset these substantial advantages.
All Other Manufacturers (Xpeng, Nio, Zeekr…) – 30.8%
Chinese manufacturers not specifically named but producing in China are subject to a flat additional tariff of 20.7% (30.7% in total). This rate applies to companies that were part of the EU’s broader anti-subsidy investigation but did not receive individual assessments.
Tesla – 17.8%
Tesla, which manufactures some of its vehicles in China for export to Europe, is subject to a comparatively low tariff of 7.8% (17.8% in total). The company applied for an individual examination, which revealed that it received lower subsidies compared to other Chinese manufacturers. This lower tariff reflects Tesla’s limited reliance on Chinese state support and its cooperation during the EU’s investigation.
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A Real Reason For Tariffs on Chinese Electric Vehicles
The Tariffs on Chinese Electric Vehicles are specifically designed to safeguard domestic production in Europe, ensuring that local manufacturers can compete on an even footing with heavily subsidized imports.
The EU’s tariffs on Chinese EVs represent a significant shift in trade policy, reflecting growing concerns over the impact of state subsidies on global competition. By imposing variable tariffs based on the level of subsidy support and cooperation with investigations, the EU seeks to create a fairer playing field for manufacturers producing in China and those in the EU. While these measures aim to protect European automakers, they are likely to strain EU-China trade relations and could lead to retaliatory actions.
