EU To Impose Countervailing Duty Of 9% On Tesla's China-made BEVs

(RTTNews) - The European Commission is disclosed its draft decision to impose countervailing duties of up to 36.3 percent on imports of battery electric vehicles (BEVs) from China. The Commission said the unfair subsidization is causing a threat of economic injury to BEV producers in the European Union.

The draft decision comes as part of its ongoing anti-subsidy investigation that began on October 4, 2023 and is to be concluded within a maximum of 13 months of initiation, which will be by November 4, 2024.

The commission had concluded that the BEV value chain in China benefits from unfair subsidization as part of its ongoing investigation.

The Commission had formally initiated an ex-officio anti-subsidy investigation on imports of BEVs originating in China on October 4, 2023.

Following the pre-disclosure of the level of provisional countervailing duties it would impose on imports of BEVs from China in June, the Commission has now disclosed its draft decision on the level of duties to be imposed after taking into account the comments received from interested parties and the conclusion of a number of investigative steps.

The Commission has made slight adjustment of the proposed duty rates based on substantiated comments on the provisional decision.

The individual duties proposed in the draft decision to apply to the three Chinese producers would be 17.0 percent on BYD BEVs, 19.3 percent on Geely BEVs and 36.3 percent on SAIC BEVs.

Among other BEV producers in China, other cooperating companies will pay a duty of 21.3 percent and all other non-cooperating companies will pay 36.3 percent.

Following a special request made by US-based EV maker Tesla, a BEV producer in China, Tesla's individual duty rate has been fixed at 9 percent at this stage. The interested parties will once again be given the opportunity to comment as was also done at provisional stage. They also have the possibility to request hearings with the Commission services as soon as possible, and to provide comments within ten days.

The Commission will then analyze all comments by interested parties, and the opinion of Member States to reach a final decision that will be published in the Official Journal of the European Union.

The duties would be collected only if and when definitive duties are imposed, which will be before November 4, 2024. These duties are to be imposed within 4 months after imposition of the provisional duties.

On July 4, 2024, the Commission published in the Official Journal of the European Union the regulation imposing provisional countervailing duties on imports of BEVs from China. The duties entered into force on July 5, 2024.

These duties will be added on top of the ordinary import duty of 10 percent. The aim of imposing these duties will ensure that EU and Chinese industries compete on a level playing field, and not to close the EU market to such imports.

The entire BEV value chain is heavily subsidized in China, and imports of Chinese BEVs presented a threat of clearly foreseeable and imminent injury to EU industry.