Europe Is Levying Tariffs Against Chinese EVs—See How High

• The European Commission has passed tariffs aimed at Chinese EV makers after a year-long anti-subsidy probe, alleging high subsidies from the Chinese government.

• Automakers with a have been hit with tariffs as high as 35.3%, in addition to an existing 10% import duty, though the measures are lower for a number of automakers including Tesla vehicles from its Shanghai plant.

• A number of Chinese brands, including Leapmotor, have been working on setting up local production in Europe.

Weeks ago the Biden administration's tariffs aimed at electric vehicles from China entered into force, creating a formidable hurdle for a number of automakers with a manufacturing presence in China. Even months before the 100% tariffs were implemented, their anticipation had already upset the US product plans of several automakers, including Volvo and Lotus, while creating logistical challenges for others.

Last month the European Union passed its own tariffs measures against EVs produced in China, citing high subsidies from local governments that allow Chinese automakers to offer vehicles at prices below those of European automakers. The vote to impose the tariffs was taken following an anti-subsidy probe launched by the EU in 2023.

"As previously disclosed, the 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," the European Commission noted in a statement.

The duties implemented are not as high as those adopted by the US, with automaker SAIC being subject to a 35.3% tariff in the EU, but they are seen as more consequential as a number of Chinese brands already have a presence in Europe, and thus have far more to lose.

Volvo and Polestar parent company Geely, by contrast, now faces an 18.8% tariff in Europe, while BYD has been hit with a 17.0% tariff.

Tesla did not escape scrutiny either, and now faces a 7.8% tariff on models produced in Shanghai for export. But Tesla's sales are more easily offset by the presence of a plant outside of Berlin.

The fallout, therefore, is much more immediate in Europe even if the tariffs themselves are not as high, and concerns a market that has become important to a number of automakers based in China as well as their western partners.

Germany was among five countries that voted against the tariffs, while 10 voted in favor and 12 abstained.

"This decision was based on growing evidence about the recent and rapid rise in low-priced exports of electric vehicles coming from China to the EU," the European Commision said in a statement.

The tariffs themselves were also implemented against a backdrop of a historic manufacturing crisis at VW, which now threatens several plants in Europe, and which is seen as having been partially prompted by a steady loss in market share in a number of key markets including China.

Efforts are now underway by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products to negotiate an alternative to the tariffs, with automakers eager to preserve their gains in market share in Europe while also seeking to avoid a wider trade war. The ministry has also filed a dispute with the World Trade Organization (WTO) in response to the tariffs.

Overall, the imposition of tariffs hints at an unpredictable future with a more strained trade landscape between the EU and China, even if the new measures themselves are survivable for some automakers.

Will tariffs succeed in keeping most Chinese EV models out of Europe, or will they have a negligible effect on the EV market? Let us know what you think in the comments.