EU Proposes Definitive Duties on Chinese Battery Electric Vehicle Imports

The European Commission has officially proposed imposing definitive countervailing duties on imports of battery electric vehicles (BEVs) from China, signaling a significant escalation in trade measures aimed at protecting the EU’s automotive industry. The proposed duties, ranging from 17% to over 36%, target Chinese companies accused of receiving unfair subsidies that undermine European competitors.

According to the proposal, specific duty rates have been set for different Chinese automakers. BYD would face a 17% duty, Geely 19.3%, and SAIC the highest at 36.3%. Other cooperating companies would be subject to a 21.3% duty, while non-cooperating firms would also see a 36.3% rate. Notably, Tesla, which exports vehicles from its Shanghai plant, is proposed to face an individual duty rate of 9% due to its full cooperation with the Commission's investigation.

The European Commission's investigation, which examined over 100 firms, concluded that Chinese subsidies to these companies create an unfair competitive advantage. The proposal reflects the Commission's conviction that it has accurately assessed the extent of these subsidies, particularly in Tesla's case.

Interested parties have until August 30 to provide feedback on the proposal, after which the Commission will review the comments. The proposal is expected to be adopted unless a qualified majority of EU member states—15 out of 27 countries representing 65% of the EU population—votes against it. If approved, the final decision will be published in the EU’s official journal by October 30, with the measures set to last for five years.

The Commission had previously set slightly higher provisional countervailing duties in early July, but the current proposal has been adjusted following "technical corrections." It was confirmed that there would be no retroactive collection of duties for registered imports during the three months before the imposition of the provisional duties. However, Chinese exporters will still need to provide guarantees until the final duties are enforced.

These countervailing duties will be in addition to the standard 10% import duty already levied on BEV imports. Despite China's request for consultations with the World Trade Organization (WTO), the EU remains confident that its investigation and measures are fully compatible with WTO rules and does not anticipate any delays in the implementation timeline.