The European Commission’s final tariff decision will be published by Oct. 30, at the latest
Tesla Inc.’s stock rose 1.5% in premarket trades Tuesday after the European Commission cut its planned tariff on imports of the company’s electric vehicles from China.
In a statement, the European Commission said it plans to grant an individual duty rate of 9% to Tesla TSLA-0.73% as an exporter from China. Last month the Commission said that Tesla, along with several other EV manufacturers in China, would be subject to a 20.8% average duty. However, the Commission noted at the time that Tesla may receive an individually calculated duty rate “following a substantiated request.”
The 27-nation bloc also adjusted the planned tariffs for a number of Chinese EV makers Tuesday. The European Commission plans to impose a 17% tariff on BYD, down from 17.4% in last month’s announcement. The planned tariff for Geely is now 19.3%, down from 19.9%, and the proposed tariff for SAIC is 36.3%, down from 37.6%.
Interested parties have the opportunity to comment on the European Commission’s findings. “Once the Commission has analysed all comments by interested parties, and Member States have given their opinion, the final decision will be published in the Official Journal of the European Union,” the European Commission said in the statement. The decision, which will be in force for five years, will be published in the Official Journal by Oct. 30, 2024, at the latest.
European Commission President Ursula von der Leyen announced the anti-subsidy investigation in September 2023 during her State of the European Union speech, prompted by the rapid rise in low-priced exports of electric vehicles coming from China to the EU. The Commission formally initiated the anti-subsidy investigation on imports of EVs from China on Oct. 4, 2023.
Speaking during the conference call to discuss Tesla’s second-quarter results last month, Chief Financial Officer Vaibhav Taneja said that the company is adjusting its import strategy from China to Europe as a result of the European Commission’s investigation. During the second quarter, he explained, Tesla started building right-hand Model Ys out of Berlin for delivery to the U.K. “We’re still importing Model 3s into Europe out of Shanghai, and we are still evaluating what is the best alternate to manage all this just on the examination by the European authorities,” he added.
Taneja also said that Tesla was confident that it should get “a better rate” than the tariff initially proposed by the European Commission.
In its second-quarter results last month, Tesla said it significantly increased deliveries in several markets supplied by the company’s Gigafactory Shanghai, including South Korea.
Tesla shares are down 10.4% in 2024, compared with the S&P 500 index’s SPX-0.20% gain of 17.6%.