The Electric Car Revolution: EU ‘U-Turns’, Slashing Import Taxes for Chinese-Made EVs

Image source: Reuters

Tesla, along with other automakers such as BMW and BYD, experienced positive sales growth following the announcement of amended import taxes on vehicles from China.

In July, the EU decided to increase the import tax on Teslas imported from China to 20.8%. However, at the end of August, the tax was reduced to 9% after Tesla filed an appeal.

Another beneficiary of the import tax adjustment is the electric MINI by BMW. Initially, this model faced a tax of up to 37.6%, the highest rate due to non-cooperation in the investigation. However, after a review, the EU amended the tax for the Mini Cooper EV to 21.3%.

BMW’s Mini Cooper EV benefits from reduced import taxes into the EU. Image source: CarnewsChina

Import taxes for Chinese automakers have also been lowered. For instance, BYD’s tax was reduced from 17.4% to 17%, while Geely’s tax was adjusted to 19.3%. SAIC Group’s tax was decreased from 37.6% to 36.6%.

According to a spokesperson from the American automaker, Tesla in China does not receive as many subsidies from the government as some other brands. As a result, the company presented evidence to appeal the 20.8% tax rate.

However, Tesla is not exempt from taxes but rather pays a lower rate compared to many other Chinese brands.

The European Union discovered that Tesla was purchasing batteries from China at prices significantly lower than market rates, which was considered a strategy to receive support from the Chinese government, creating an unfair advantage when competing with brands manufactured in Europe or the US.

A separate EU report also highlighted ways in which Tesla and BMW receive support from China. Specifically, these brands often lease land for factory construction and dealerships at discounted rates, enjoy preferential interest rates on loans, and receive various subsidies.