European Commission to increase duties on Chinese EVs to up to 48.1%

The European Commission has proposed increasing the duty on imported Chinese electric vehicles by up to 38.1% on top of the 10% tariff already imposed on imports from external automakers.

In a June 12 document sent to all interested parties, including the government of China, Chinese companies and EU member states, and published on its website, the EC pre-disclosed the proposed provisional measures.

According to the document, BYD Group would face an additional provisional duty of 17.4%, Geely Group 20% and SAIC Group 38.1%.

Other cooperating companies would face an extra 21% provisional duty, while for all other companies it would be 38.1%.

The EC said in a separate Q&A document on the pre-disclosure that the provisional duties were the result of an EU anti-subsidy investigation and aimed to ensure that the EU and Chinese industries competed on a level playing field, not to close the EU market to Chinese EV imports.

It also said the countervailing duties would be added on top of the ordinary import duty of 10% levied on imports of battery EVs.

It said the investigation revealed that the entire battery EV value chain in China was heavily subsidized, and that imports of Chinese BEVs presented a threat of clearly foreseeable and imminent injury to EU industry.

It said it had analyzed a large volume of evidence relating to each of the investigated companies and on that basis was able to calculate a level of provisional duties corresponding to the levels of subsidization found in each case.

"A successful green transition worldwide will be achieved most effectively and rapidly through fair competition and adherence to global rules," the EC said.

"While the EU welcomes imports of goods necessary for the green transition and to achieve the relevant targets, these imports must compete on fair terms with the corresponding EU goods," it said. "If these imports are unfairly subsidized, they unduly hurt the EU industry and ultimately undermine the achievement of these goals."

The EU aims for all new cars registered in Europe to be zero emission by 2035, with the EC saying the BEV sector was crucial for the EU to achieve its green transition and it was therefore important to prevent strategic dependencies on foreign partners.

"The EU's green transition cannot be based on unfair imports at the expense of EU industry," it said.

July 4 deadline for provisional findings

The EC said the affected companies had received detailed information on their own calculations, which would allow them to provide comments on the accuracy of the duty rate calculations within three working days.

"If the comments received from the companies concerned following pre-disclosure provide sufficient counter-balancing evidence, the Commission can revise its calculations in accordance with the law and calculate new levels of provisional duties," it said.

The EC said it would publish a regulation explaining in detail the provisional findings that led to this level of duties in the Official Journal by July 4 at the latest, with the duties then to enter into force the next day.

The EC first announced it had started an anti-subsidy proceeding on Chinese EVs in early October, saying at the time that an in-depth analysis had shown that the existence of subsidization in China’s EV industry had hurt EU industry.

"On the basis of publicly available information, there is sufficient evidence demonstrating that imports of the product under investigation originating in the People's Republic of China benefit from countervailable subsidies provided by the Government of the People's Republic of China," it said at the time, adding that those subsidies had allowed the subsidized imports to rapidly increase their market share in the EU.

Associations respond

In response to the EC decision, the European Automobile Manufacturers’ Association said in a statement that it had consistently affirmed that free and fair trade was essential for a globally competitive EU automotive industry, with healthy competition driving innovation and choice for consumers.

"What the European automotive sector needs above all else to be globally competitive is a robust industrial strategy for electromobility," ACEA Director General Sigrid de Vries said, adding that this meant ensuring access to critical materials and affordable energy, a coherent regulatory framework, sufficient charging and hydrogen refilling infrastructure and market incentives, among others.

Meanwhile, European green group Transport & Environment welcomed the announcement in a statement, but said a broader industrial policy was needed to build up the EU EV supply chain while delivering affordable, locally made EVs.

It said an EU industrial policy should also set strong sustainability criteria that could reward local clean manufacturing, with an EU investment plan needed to support EV and battery manufacturing in a more effective way.

T&E said its recent analysis had found that one in four EVs sold in Europe in 2024 could be imported from China, with the EU to keep three-quarters of the revenue raised from tariffs, which it said should be allocated to scaling up the battery supply chain via the EU Innovation Fund.