<p><img src="https://hawk-oss.hawkinsight.com//picture//202406/1188803233_300.jpeg" style="width: 100%;">On Wednesday, the European Commission (EC) concluded that China's pure electric vehicles (BEV) and their supply chains benefit from unfair subsidies.。As a result, the European Commission announced a 17.4% to 38.1% temporary import duty, depending on the automaker。These tariffs are imposed on top of the existing 10% tariff。- ADD - The Commission has contacted the Chinese authorities to discuss these findings and explore possible ways to resolve the problem。If ongoing discussions with Chinese authorities fail to produce a solution, the tariffs will take effect on July 4.。These duties will initially be guaranteed by methods determined by the customs of the member states and will only be charged if later explicit duties are imposed.。The rules applied by the Personal Duties Committee to the three sampled Chinese producers are:- Advertising - BYD: 17.4% Geely: 20% SAIC: 38.1% Other pure electric vehicle producers in China that cooperate with the survey but are not sampled will be subject to the following weighted average tariff: 21%。All other Chinese pure electric vehicle producers that do not cooperate with the investigation will be subject to the following remaining tariffs: 38.1%。The European Commission confirmed that all the mentioned tariffs were imposed on top of the existing 10%。The Chinese automakers that cooperated with the European Commission's survey but were not sampled were (in alphabetical order) Aichi Automobile, BMW Brilliance, Changan Automobile, Chery Automobile, Dongfeng Motor, FAW Automobile, Great Wall Motor (GWM), Jianghuai Automobile, YueMoto r, Weilai, Xiaopeng.。these products will be subject to an additional 21 percent tariff on top of the current 10 percent import tariff;The new import tariff will be 31% from July。- Advertising - Chinese-made Tesla imports into the EU will also face an additional 21% increase in import duties, a weighted average that applies to all companies that cooperate with the survey but are not sampled。That could change, though, as Tesla files for separate review。EC responded to CarNewsChina's request for comment as follows: "Tesla, a pure electric vehicle producer in China, has made a tangible request for a so-called separate review in order to obtain its tariff level based on the subsidies it receives separately.。The request is currently being processed for review and the final assessment may be reflected in the level of responsibility in the final phase (starting in November).。The only EU-built Tesla car is the Model Y, assembled in Giga, Berlin.。The Tesla Model 3 sold in the EU is made in China。Chinese electric vehicle manufacturers that import vehicles into the EU and are affected include the following brands: MG (SAIC) Smart (Geely) Polestar (Geely) Ola (Great Wall Motor) BYD Weilai Lotus (Geely) LEVC (Geely) SAIC Chase Aichi Automotive Linker (Geely) Dongfeng Voyah (Dongfeng) Changan Xiaopeng Automotive (Volkswagen Support) Zeekr。China's electric vehicle registrations in Germany in May: Weilai 35, BYD 201, MG 2,699。Data source: KBA, compiled: CNC October 4, 2023, the European Commission launched a countervailing investigation on Chinese imports of pure electric vehicles (BEV)。Any investigation shall be concluded within a maximum of 13 months after initiation。The Commission may announce provisional tariffs within nine months of its launch (by July 4 at the latest).。Final measures will be decided in four months。According to the European Commission report, Tesla may get a unique tariff rate, while other Chinese producers can request review。The proposed responsibilities will be shared with all stakeholders and posted on the Commission's website.。EDITOR'S COMMENT The European Commission's investigation shows that BYD and its supply chain receive the least subsidies from the Chinese government; therefore, the temporary tariffs are the lowest - 17.4%。BYD is a privately held company known for its extreme vertical integration as it tries to handle as much of its business as possible.。ch as internal as possible。For example, it owns lithium mines, makes its own batteries, develops its own electric motors, owns a large shipping company, and even has a vehicle insurance company。Geely Group is another private company。Think of it as China's Volkswagen, with more than a dozen brands such as Lotus, Zeekr, Volvo, Polestar, LinkedIn or London Electric Vehicle Company (LEVC)。The EC concluded that their use of unfair subsidies was similar to the BYD case, but slightly higher, resulting in an additional 20% tariff.。Shanghai Automotive Industry (SAIC) is the largest of the "Big Four" of China's four major state-owned automobile manufacturers.。It owns MG, IM, Maxus, Rising Auto and other brands, and operates the Wuling brand in the joint venture SGMW with General Motors of the United States.。SAIC participated in the investigation and provided samples; however, despite its efforts, it received the highest tariff, 38.1%, which indicates that the investigation concluded that d it used many unfair state subsidies。at today's regular press conference, chinese foreign ministry spokesman lin jian criticized the eu investigation as a typical example of protectionism。However, despite many harsh words and tough statements from China today and in the coming days, the tariffs are much more moderate than expected.。Many EU carmakers have lobbied against the commission's investigation, and it's no wonder their stakes are high。For Volkswagen, China is the largest market, and 20% of Mercedes-Benz is controlled by Chinese companies (10% belongs to state-owned BAIC, 10% belongs to Geely founder Li Shufu)。Volvo, for example, is wholly owned by Geely。In addition, EU automakers are increasingly closely linked with Chinese electric vehicle manufacturers because Audi will use SAIC's IM electric vehicle platform in its new Audi electric vehicles because its PPE development time is too long。Volkswagen has set up lithium production joint ventures with Chinese companies and will build several electric cars based on the Xiaopeng platform.。It is therefore not surprising that Germany, Sweden and Hungary have said they are not in favour of new tariffs for fear of Chinese retaliation.。In addition, tariffs may soon not be enough to protect Chinese electric car competition in the EU。Many countries are already building or preparing car factories in the EU.。BYD plans to build a plant in Hungary, Chery chose Barcelona as its first EU electric car factory, Great Wall is choosing between Poland, Germany, the Czech Republic and Hungary, and Zero Run will be assembled at the Stellantis Polish plant。How the EU will protect itself from potential subsidies from the Chinese government when the Chinese make cars in the EU？We will be watching this closely。Read also Turkey's surprise 40% tariff on Chinese vehicles from July 7</p>