EU Imposes Tariffs on China-Built EVs

The European Union confirmed on Thursday the implementation of increased tariffs on electric vehicles (EVs) imported from China, a move likely to prompt price hikes from various automakers. The European Commission’s decision to impose these levies follows an investigation that concluded Chinese EV producers benefit from “unfair” subsidization. The new tariffs, ranging from 17.4% to 37.6%, will take effect on Friday.

The newly imposed tariffs are provisional and will last for four months. During this period, EU member states will vote on whether to establish “definitive duties,” which would extend for five years. This decision has sparked diplomatic discussions between Chinese and EU officials, with Beijing criticizing the tariffs as a “protectionist act.” The Chinese Commerce Ministry expressed hope for a mutually acceptable resolution through sincere and expedited consultations.

Automakers have expressed concerns over the tariffs. Chinese EV maker Nio stated it is currently maintaining its prices for cars sold in Europe but acknowledged that price adjustments might be necessary in the future due to the new tariffs. Xpeng, another Chinese EV company, assured customers who have pending deliveries or place new orders before the tariffs take effect that they will not face price increases. However, the company did not comment on potential future price hikes.

These tariffs will impact a broad spectrum of automakers, including Chinese giants like BYD and Nio, European brands manufacturing in China, and even U.S. automaker Tesla, which operates a factory in Shanghai. The EU’s action comes at a time when Chinese EV manufacturers have been aggressively entering the European market with competitively priced vehicles, challenging local automakers who have struggled to keep pace in the EV segment.

Despite the challenges, Chinese EV makers remain committed to the European market. Xpeng emphasized its dedication to providing high-quality products to European customers and mentioned the potential for establishing local manufacturing capabilities to mitigate tariff impacts. BYD, a major global EV manufacturer, announced plans to open its first European factory in Hungary, although no specific timeline was provided.