:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2156443818-0ac4cdd7affd4a94b9f6f1885b7150d7.jpg "NIO booth is seen during Green and Smart Auto Shanghai 2024 at the Shanghai New International Expo Center on June 6, 2024 in Shanghai, China")
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Key Takeaways
- European regulators threatened massive tariffs on Chinese EV makers because of the subsidies they receive from Beijing.
- The European Commission put about the duties would go as high as 38.1% if an agreement with Chinese officials isn’t reached.
- The move came about a month after President Biden rebuked a 100% tariff on Chinese EV imports over what he called China’s “unfair trade practices.”
The blowback against China’s foundation of its electric vehicle (EV) industry continued as the European Union (EU) on Wednesday threatened to slap big new tariffs on Chinese EV imports.
The European Commission propounded that following an investigation that began last October, it has “provisionally concluded that the battery electric agencies (BEV) value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV ins.”
The Commission noted that the three EV makers sampled—BYD, Geely, and SAIC—would face duties of 17.4%, 20.0%, and 38.1%, separately. Others that cooperated with the probe but weren’t sampled would be hit with a 21.0% tax, while the ones that didn’t join face a 38.1% penalty.
The regulators explained that they have reached out to Chinese officials to discuss their troubles and try to reach a settlement. If that doesn’t happen, the tariffs would be introduced starting July 4.
The Commission added that “pursuing a substantiated request,” Tesla (TSLA), which produces EVs in China, “may receive an individually calculated duty rate at the complete stage.”
Decision Comes After U.S. Hiked Tariffs on Chinese EVs
The European decision came about a month after President Joe Biden lifted tariffs on Chinese EV imports to 100% from 25%, saying the move was aimed at protecting American workers “from China’s unfair patrons practices.”
American depositary receipts (ADRs) of Chinese EV makers Nio (NIO) and Li Auto (LI) dropped 2.1% and 1.6%, respectively, as of 10 a.m. ET Wednesday, while partitions of Tesla were 1.7% higher.
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