Tesla takes EU to court over tariffs on Chinese EVs

Jan 27

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Jack Aylmer Energy Correspondent

By Jack Aylmer (Energy Correspondent), Ian Kennedy (Lead Video Editor), Mohammed Ali (Senior Graphics Designer)

Tesla has filed a lawsuit against the European Union, challenging tariffs imposed on electric vehicle imports from China. The case, initiated by the Elon Musk-led company’s Shanghai subsidiary, was confirmed by the European Court of Justice on Monday, Jan. 27, though specific details about the legal arguments remain undisclosed.

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Why did the EU first impose tariffs on EVs from China?

This litigation action follows the EU’s approval of anti-subsidy tariffs in October 2024. The duties range from 7.8% for Tesla to as high as 35.3% for other Chinese electric vehicle manufacturers. These charges are in addition to the standard 10% import tariff already applied to the industry.

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The EU’s decision stemmed from an investigation into allegations of unfair practices by the Chinese government, including soft loans, favorable land deals and subsidies for suppliers. These measures reportedly enabled Chinese EV manufacturers to offer vehicles at what officials claimed were “artificially low” prices that undercut European automakers.

How do these tariffs impact Tesla and other automakers?

Several Chinese carmakers and Germany’s BMW, which produces a significant portion of its vehicles in China, have also filed similar claims against the EU over these tariffs.

Electric vehicles manufactured in China accounted for about 20% of all EV sales in the EU in 2023, equating to about 300,000 units. Tesla represented 28% of these imports, according to European Federation for Transport and Environment

The EU’s investigation found that Tesla received less government support compared to other manufacturers. Officials said this results in the company being subject to the lowest tariff rate among those affected.

What happens next?

In response to the tariffs, Tesla has adjusted its import strategy. The company exports its Model 3 vehicles from Shanghai to the EU, while producing its Model Y locally at its Berlin facility.

The EU’s second-highest court, the General Court, will hear Tesla’s lawsuit. Proceedings in such cases typically last around 18 months. Rulings can be appealed to the European Court of Justice. A spokesperson for the European Commission stated that the EU is prepared to defend its decision in court.

Tags: China, Electric Vehicle Batteries, Electric vehicles, Europe, European Union, EV, Lawsuit, Tariff, Tesla

[Jack Aylmer]

TESLA HAS FILED A LAWSUIT AGAINST THE EUROPEAN UNION OVER TARIFFS IMPOSED ON IMPORTS OF ELECTRIC VEHICLES FROM CHINA.

THIS CASE, BROUGHT BY THE ELON MUSK-LED COMPANY’S SHANGHAI SUBSIDIARY, WAS CONFIRMED BY THE EUROPEAN COURT OF JUSTICE ON MONDAY.

THE LEGAL ACTION COMES AFTER THE EU IMPOSED ANTI-SUBSIDY TARIFFS IN OCTOBER-

RANGING FROM 7.8% FOR TESLA AND UP TO 35.3% FOR OTHER CHINESE ELECTRIC VEHICLE MANUFACTURERS.

THESE CHARGES ARE IN ADDITION TO A STANDARD 10% IMPORT TARIFF APPLIED TO THE INDUSTRY.

THE DECISION FOLLOWED AN EU INVESTIGATION INTO ALLEGED UNFAIR PRACTICES BY THE CHINESE GOVERNMENT-

HELPING MAKE PRICES ON EVS COMING FROM THE NATION ARTIFICIALLY LOW AND UNDERCUTTING EUROPEAN AUTOMAKERS THROUGH SOFT LOANS, CHEAP LAND DEALS, AND SUBSIDIES FOR SUPPLIERS.

TESLA IS NOT ALONE IN CHALLENGING THESE MEASURES-

SEVERAL CHINESE CARMAKERS AND GERMANY’S BMW-

WHICH MANUFACTURES A SIGNIFICANT PORTION OF ITS CARS IN CHINA-

ALSO FILED SIMILAR CLAIMS.

ABOUT 20% OF ELECTRIC VEHICLES SOLD IN THE EU LAST YEAR CAME FROM CHINA-

WITH TESLA ACCOUNTING FOR 28% OF THESE IMPORTS, ACCORDING TO THE ENVIRONMENTAL NGO TRANSPORT AND ENVIRONMENT.

THE EU’S INVESTIGATION FOUND TESLA RECEIVED LESS SUPPORT FROM THE CHINESE GOVERNMENT COMPARED TO OTHER MANUFACTURERS-

RESULTING IN IT RECEIVING THE LOWEST TARIFF RATE IMPOSED.

IN RESPONSE TO THE TARIFFS, TESLA STATED IT IS ADJUSTING ITS IMPORT STRATEGY-

THE EV MAKER CURRENTLY EXPORTS ITS MODEL 3 FROM SHANGHAI TO THE EU, WHILE PRODUCING ITS MODEL Y AT ITS BERLIN FACTORY.

TESLA’S LAWSUIT WILL BE HEARD AT THE GENERAL COURT-

THE EU’S SECOND-HIGHEST COURT-