European Union Hits E.V.s From China With Tariffs Up to 38%

The European Union said on Wednesday that Chinese manufacturers would face tariffs of up to 38 percent on electric vehicles imported into the bloc, in what E.U. leaders called an effort to protect the region’s manufacturers from unfair competition.

The bloc will impose provisional duties ranging from 17.4 percent to 38.1 percent for three of the leading Chinese manufacturers, including BYD, Geely and SAIC. Other Chinese automakers face a tariff of 21 percent or 38.1 percent, depending on their cooperation with the European Union on its investigation into the matter.

The move to increase tariffs has been criticized by several European automakers that fear it will drive up prices, scare off customers and lead to costly retaliation from China.

The European Union defended the action, saying in a statement that an investigation had found that the electric-vehicle supply chain in China “benefits heavily from unfair subsidies in China, and that the influx of subsidized Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to E.U. industry.”

The European Commission, the European Union’s executive branch, opened an investigation last fall to determine whether the Chinese government was effectively subsidizing its production of electric cars and sending them to Europe at prices that undercut European competitors.

The automotive sector provides nearly 13 million jobs across the 27-nation bloc, the world’s second-largest market for electric vehicles after China. Imports of electric cars from China last year reached $11.5 billion, up from $1.6 billion in 2020, and generated a trade surplus of more than 100 billion euros, or $107 billion.

About 37 percent of all electric vehicles imported to Europe come from China, including cars made by Tesla, BMW and Dacia, owned by Renault. Chinese brands account for 19 percent of the European market for E.Vs. Their numbers have been growing steadily, according to a study by Rhodium Group.

Nevertheless, the commission zeroed in on three of the leading Chinese makers of electric cars — BYD, Geely and SAIC — all of which agreed to cooperate with the investigation.