The European Commission has lowered its proposed additional tariffs on many of the Electric Vehicles (EVs) exported to Europe from China, including models from Tesla, Volkswagen Group, BMW, BYD, Volvo parent Geely and SAIC’s MG Motor.
In a draft decision released last week, the commission reduced to 9 per cent the extra tariff on Tesla Model 3 sedans exported to Europe from the U.S. automaker’s Shanghai factory.
In July, the commission had said it would apply a 20.8 per cent tariff on Tesla’s imports from China.
Additional tariffs imposed on the largest Chinese exporters to Europe were also lowered.
These include BYD (down to 17 per cent), Geely (down to 19 per cent) and SAIC (down to 36.3 per cent). The new rates are slightly lower than previously announced.
BMW said that its joint venture in China, which produces the electric Mini, now qualifies for a lower duty of 21.3 per cent.
VW Group’s Cupra Tavascan will also benefit from a lower 21.3 per cent tariff.
The electric SUV is built in Hefei, China by the Volkswagen Anhui joint venture for VW Group’s Seat business.
Other companies that cooperated with the inquiry such as Dongfeng Motor Group and Nio will face 21.3 per cent tariffs, while those that did not cooperate will see a 36.3 per cent additional levy.
BMW welcomed the commission’s decision to bring Spotlight Automotive, its joint venture with Great Wall Motors in China for the production of fully electric Mini cars, into the circle of cooperating companies.
The Mini was not part of Brussels’ sample analysis in the run-up to the tariff announcement, which meant China-built electric Minis were initially automatically subjected to the highest tariff level of 37.6 per cent.
Seat said it is working with its parent company VW Group to reduce the tariff on the Tavascan even lower than the new 21.3 percent duty.
The commission said some Chinese companies in joint ventures with EU automakers may also receive lower planned punitive duties on China-built EV imports. It also said that no retroactive duties would be imposed.
Tesla’s lower rate explained
Tesla had requested a recalculation of its rate, to be based on the specific subsidies the company had received.
The commission said it had verified that Tesla received less subsidies from the Chinese government compared with the country’s EV makers which Brussels had investigated.
The bulk of benefits received by Tesla were in the provision of batteries at below market value, EU officials have said.
Among other state-sponsored programs it benefited from are land-use rights, income tax reduction and grants in various forms, including a national subsidy that all exporting producers received, officials said.
The commission says the additional tariffs are aimed at countering what it says are unfair subsidies that Beijing gives to Chinese EV makers.
It said in July that China subsidizes its EV industry to a degree that causes economic harm to European automakers.
The latest changes reflect comments and requests made by automakers after provisional tariffs were released on July 4.
Tesla was among automakers calling for a reduction in tariffs, as were VW Group and BMW.
Following the August 20 release of the draft, automakers can request hearings and offer comments within 10 days.
The commission will then present a “final determination” to EU states, who will then vote on the regulation.
The definitive rules are planned to apply by October 30 and they will be in force for five years.
Market share
Since the provisional tariffs were introduced in July, Chinese automakers have seen a decline in market share.
The tariffs will likely cut imports from China by a quarter, amounting to a value of roughly $4 billion, according to a recent estimate by Moritz Schularick, president of Germany’s Kiel Institute for the World Economy.
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