The European Commission (EC) has made the decision to impose additional tariffs of up to 38% on Chinese EVs, following preliminary results of its anti-subsidy investigation which found that prices are being distorted by Chinese state support.

EU commission

The investigation provisionally concluded that the battery EV (BEV) value chain in China benefits from “unfair subsidisation” which is “causing a threat of economic injury to EU BEV producers”.

Duties imposed will differ for each OEM, with three of the major Chinese EV makers sampled and singled out for specific tariffs. If an agreement is not reached with Chinese authorities on an effective solution for the subsidisation, from July 4 the commission would apply an additional tariff of 17.4% on BYD, 20% on Geely and 38.1% on SAIC. Tesla may also receive an individually calculated duty rate when definitive tariffs are imposed. 

Other BEV OEMs in China which cooperated in the investigation but haven’t been sampled would be subject to a tariff of 21%, and those which didn’t cooperate with the investigation will be subject to a 38.1% tariff.

All brands, including European brands such as BMW, Volkswagen, Mini, Polestar, Volvo, Dacia will all be affected. VW Group, which is in a joint venture with SAIC, has commented on the changes in tariffs. 

The investigation, which was initiated on October 4 last year, is set to be concluded in a maximum of 13 months. Provisional countervailing duties may be published by July 4 at the latest, and definitive measures are to be imposed within four months of the imposition of the provisional duties.

The EC said the sampled companies have individually received information about their own calculations and have the possibility to comment on the accuracy of the findings. If it is found that there is enough evidence to counterbalance the EU’s findings, the Commission can revise its calculation in accordance with EU law.

Margaritis Schinas, vice-president of the EC, said the value of Chinese EVs “benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers”.

Valdis Dombrovskis, executive vice-president of the EC added: “When our partners breach the rules, we will assert our rights. Today we have reached a milestone in our anti-subsidy investigation. This is based on clear evidence of our extensive investigation and in full respect of WTO rules.”

If the provisional tariffs are imposed, it could bring in more than €2 billion ($2.165 billion) a year to the EU, but it also risks starting a trade war with China that could see countermeasures against EU imports to China put in place.


A spokesperson for the ECG said: “The planned punitive tariffs affect not only Chinese brands, but all vehicles manufactured in China for the European market. Unilateral and especially short-term trade barriers disrupt the entire supply chain, including transport, storage and technical services, thus greatly impacting our members’ businesses. Therefore, we are interested in reaching a swift agreement and ensuring clarity.”

Germany, Sweden and Hungary’s governments have stated previously that they did not approve of the tariffs, with German chancellor Olaf Scholz recently stating that the customs barriers would “ultimately just make everything more expensive, and everyone poorer”.

The EC’s decision follows in the footsteps of the US government, which announced in May that it would increase import duties on EVs by more than 100% to control imports from China, $18 billion-worth of imports from the country

Turkey has also just announced a 40% additional tariff on vehicle imports from China, effective from July 7, 2024. The decision aims to mitigate potential negative impacts of Chinese EVs saturating Turkey’s domestic market and bolster its national automotive industry against what is widely perceived as Chinese vehicle ‘dumping’.