European Union (EU) Decides to Impose 38% Tax Hike on Chinese EVs

The European Union (EU) decides to impose tax hike of 38% on Battery Electric Vehicles (BEVs) made by Chinese carmakers, including Tesla. The proposed tariff hike of 38% is over the 10% duties currently being charged and it will come into effect from July 2024. The European Commission states that the battery electric vehicles value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.

As per the new proposition, China’s BYD will see a tariff of 17.4 %, Geely will attract 20%, and state-owned SIAC will see a 38.1% tax. The commission stated, “Following a substantiated request, Tesla may receive an individually calculated duty rate at the definitive stage.” A big relief for carmakers is that the new tariff won’t affect hybrids, which comes as a relief for BYD, which sells BEVs and Plug-in Hybrids. The carmaker also has plans to build a factory in Hungary, but it will not be ready and functional till 2027.

China has responded to the EU’s decision, as reported by news agency Xinhua. China responds by saying that it would be more cost-effective for the EU to draw on China’s advantages in order to develop its own EV industry.