EU to Impose Tariffs of up to 38% on Chinese EVs

The European Commission notified car makers Wednesday it would apply additional duties of up to 38.1% on imported Chinese electric vehicles from next month, a move likely to draw possible retaliation from China.

Less than a month after Washington quadrupled duties for Chinese EVs to 100%, Brussels said it would set tariffs of 17.4% for BYD, 20% for Geely and 38.1% for SAIC over what it said were excessive subsidies.

China's commerce ministry said it would closely monitor the development and resolutely take all necessary measures to safeguard the legitimate rights of Chinese companies.

The EU provisional duties are set to apply by July 4, with the anti-subsidy investigation set to continue until Nov. 2, when definitive duties, typically for five years, could apply.

The Commission said it would apply rates of 21% for companies deemed to have cooperated with the investigation and of 38.1% for those it said had not.

The new tariffs will come on top of the existing EU tariff of 10%. Western producers such as Tesla and BMW that export cars from China to Europe were considered cooperating companies.

Margaritis Schinas, a Commission vice president, told a news conference that Chinese-built cars were benefiting from unfair levels of subsidies, threatening EU producers.

"On this basis the Commission has reached out to Chinese authorities to discuss these findings and explore possible ways for resolving the issues identified," he told a news conference.

The indicative tariffs are above expectations of analysts of between 10% and 25% on Chinese EVs.

BYD, Geely, SAIC and Tesla did not immediately respond to Reuters' queries on the report.

The move comes as European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals.

China has rebuked the EU over the anti-subsidy investigation, urged cooperation and lobbied individual EU countries, but not fully spelt out what its response to tariffs would be.