Tesla and BMW have joined forces to challenge European Union (EU) tariffs on electric vehicles (EVs) made in China, marking a significant development in the ongoing trade dispute between Europe and China. The European Commission confirmed the legal challenge on Monday, stating that both companies, along with Chinese automakers BYD, Geely, and SAIC, have filed cases at the Court of Justice of the European Union.
The contested tariffs, which can go as high as 35%, were imposed by Brussels in October following an anti-subsidy investigation. The investigation concluded that Chinese EV manufacturers benefited from unfair state support, enabling them to undercut European automakers in the market.
“We take note of these cases and look forward to defending ourselves in court,” said European Commission spokesman Olof Gill.
Tesla’s EVs produced in its Shanghai factory are now subject to an additional 7.8% tariff on top of the 10% standard import tariff for EVs from China. Meanwhile, Chinese automakers face even steeper surcharges: 17% for BYD, 18.8% for Geely, and 35.3% for SAIC.
The European car industry is already under pressure due to high manufacturing costs, a slow transition to EVs, and fierce competition from China. The additional tariffs could further complicate the landscape for European automakers.
“This move adds more strain to an industry that’s already struggling to keep up with EV advancements,” commented a European automotive analyst.
China has consistently denied allegations of unfair subsidies and retaliated by imposing “anti-dumping measures” on EU brandy imports, escalating the trade tensions. The Chinese government has also filed a complaint with the World Trade Organization (WTO) over the EU’s tariffs.
The tariff scheme has sparked disagreements within the EU. Germany, a key player in the automotive industry, along with four other EU member states, opposed the measures, warning about possible retaliation against its own manufacturers.
“This is not just about tariffs; it’s about the ripple effect on our economy,” said a German official who spoke on the condition of anonymity.
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Elon Musk, Tesla’s CEO and a prominent figure in global trade dynamics, has once again found himself at the center of controversy. Musk, who was closely aligned with former U.S. President Donald Trump, previously supported policies that increased tariffs on both allies and rivals, including the EU and China, during Trump’s administration.
The legal battle now shifts to the Court of Justice of the European Union, where Tesla, BMW, and the Chinese automakers aim to overturn the tariffs. If successful, the ruling could reshape the EV trade between Europe and China and potentially ease the tensions between the two regions.