This is one of Europe’s responses to Chinese car competition: in June, the application of provisional customs duties against imports of electric cars produced in China.
The final draft of this new legislation – which should extend over five years – was presented on Tuesday, August 20, by the European Commission, but with taxes revised downwards, especially for Tesla. With a surcharge of 21%, the Model 3, manufactured in the American manufacturer’s factory in Shanghai, will only be subject to customs duties of 9%.
Updated customs duties
The stated aim of European regulators is to offset perceived unfair competition, in particular through public subsidies received by Chinese manufacturers, artificially reducing production costs.
From the beginning of July, rates could reach almost 38% of customs duties, which would be added to the 10% tax already applied to imports of electric vehicles. This taxation was therefore close to 50% in cumulative terms for the SAIC group and its MG brand, but also for a group grouped in the category of “non-cooperating companies”, in the sense that these manufacturers would not have agreed to answer questions from European investigators.
Tesla, for its part, the only foreign manufacturer to produce in China without relying on a local manufacturer, had initially received a specific rate of 21% on its Model 3 assembled in Shanghai for Europe, but not for its Model Y SUV, produced in Berlin. Enough to see a significant increase in the price of the sedan, which remains one of the most popular models in Europe.
The American manufacturer therefore sees this rate revised significantly downwards, to 9%, in the new project presented on 20 August by the European Commission.
Marginal adjustments for Chinese groups
Tesla had in fact submitted “a reasoned request for an individual examination to determine its level of entitlement based on the specific subsidies it received,” the Commission explained in a press release.
An application that “has been subject to a thorough examination”, with an “assessment of the level of subsidies received which is reflected in the levels of duties at the final stage”.
The Commission specifies that this information was verified during a visit to China, with “the same checks as for the other Chinese exporting producers included in the sample”.
Customs duty adjustments are much smaller for BYD, which goes from a rate of 17.4% to 17.0%, for Geely, from 19.9% to 19.3% and for SAIC, from 37.6% to 36.3%.
Taxes not collected before final project
These additional customs duties will come into force at the end of October, subject to approval by the 27, unless an alternative agreement is reached with Beijing by then. The Chinese government reacted strongly to the announcement of the implementation of these customs duties by threatening retaliatory measures against the automotive sector and other sectors of activity.
In this context, Europe says it is “open” to dialogue and any alternative solution emerging from Beijing to avoid these taxes criticised by some Member States, including Germany and Sweden.
Another question also arose: the Commission clarified that it would not collect the provisional taxes that came into force on 5 July. They will continue to be paid, but will remain blocked in a bank account before being returned.
The new taxes will be definitively adopted unless a qualified majority of member states (15 countries representing 65% of the European population) oppose them before the end of October, AFP said.
Source: BFM TV
