The European Union plans to impose an additional 9% tariff on Tesla autos (TSLA.US) imported from China, lower than the previously expected 20.8%.
According to the Futu Securities News App, the European Union disclosed the latest measure aimed at resisting China's subsidies to the electric vehicle industry, which is a decision draft to impose a final anti-subsidy tax on pure electric autos imported from China. The EU plans to impose an additional 9% tariff on Tesla autos (TSLA.US) imported from China, lower than the previously expected 20.8%. Auto manufacturers SAIC Motor Corporation, parent company of Volvo AB unsponsored ADR Class B, and BYD Company Limited will face additional tariffs of 36.3%, 19.3%, and 17%, respectively, slightly lower than the previously announced levels.
Officials said they will continue to negotiate with manufacturers before member states vote on the tariffs, which are set to take effect in November.
Other companies cooperating with the EU investigation but not sampled by the investigators will be subject to a tariff of 21.3%, while non-cooperating manufacturers will face a tariff of 36.3%. These rates will be imposed on top of the 10% tariff already paid by Chinese exporters.
For Tesla, a 9% tariff is relatively good news, as it is lower than the tariffs faced by other manufacturers. EU officials said one factor behind this calculation is that the Chinese government appears to have reduced subsidies to foreign-funded enterprises.
EU officials said most of the benefits Tesla receives are offered at a price below market value, including land use rights, income tax exemptions, and various forms of subsidies, including national subsidies available to all exporters.
As of press time, Tesla's stock rose 1.73% to $226.54 in after-hours trading, down 10% this year.
All parties must provide comments on the proposal and request a hearing by August 30. If a majority of member countries with binding votes do not obstruct, the European Commission will announce the final tariff regulations on October 30. These tariffs will last for 5 years and may be extended after review.
Over the past few months, the EU and China have been holding talks to explore whether another solution can be found. The EU stated that any such solution would need to comply with the rules of the World Trade Organization (WTO) and address the fundamental problem of subsidies.
Several member countries, including Germany and Hungary, have expressed resistance to the tariffs, but it requires a majority of member countries to block them.
The European Union also stated on Tuesday that it plans to give lower tax rates to joint ventures without exports during the investigation. These companies will face the same tax rates as their partners.
The EU had requested that the target companies provide guarantees for temporary tariffs, but officials said the EU would not retrospectively impose these tariffs. Officials said the tariff rate may still change before it is finalized.