The US electric car manufacturer Tesla has announced that it will raise the price of its Chinese-produced Model 3 produced in China. This decision follows the EU's planned import duties on electric vehicles produced in China, which could vary greatly depending on the manufacturer. These additional import duties are to take effect from July 1, 2024, according to Tesla announced on its website.
Background: EU plans punitive tariffs on Chinese electric cars
On June 12, 2024, the EU Commission announced its intention to increase import duties on electric cars from China to up to 38.1 percent, depending on the manufacturer. This measure not only affects Chinese manufacturers such as BYD, Nio, Great Wall Motor, Geely and SAIC, but also European and US companies such as VW, BMW and Tesla, which produce their electric vehicles in China and import them to Europe.
Effects on various manufacturers
While Tesla has already pointed out that the price of the Model 3 will rise, other manufacturers have announced different strategies. Volvo and Polestar, for example, pointed to their new production facilities in Europe, the US and Korea to avoid the impact of tariffs. German manufacturers such as BMW continue to import a significant number of electric vehicles from China, more than suppliers BYD or Nio.
Reactions of the manufacturers
Tesla stated that the price increase for the Model 3 directly related to the expected import duties. A spokesperson for the company explained that Tesla had submitted a request to possibly have a company-specific duty rate set instead of adopting the average duty of 21 percent.
Nio criticized the planned tariffs as a hindrance to global trade and environmental protection, while Volvo, a subsidiary of the Chinese Geely Group, sees the impact of the tariffs as less problematic.
China's reaction
China announced its intention to take legal action against the planned EU tariffs before the World Trade Organization (WTO). A spokesperson for the Chinese Ministry of Commerce emphasized that China would take all necessary measures to defend the legitimate rights and interests of Chinese companies.
Conclusion
The planned EU import tariffs on electric vehicles from China could have a significant impact on the European market. Tesla is preparing for a price increase for the Model 3 to counteract the additional costs. It remains to be seen how the situation will develop and whether an agreement will be reached between the EU and China.
