The EU commission announced additional tariffs ranging up to 38.1% on Chinese-manufactured EVs sold into the EU from July 2024.

The EU Commission announced a range of additional tariffs on Chinese-manufactured EV models. The new tariffs ranging up to 38.1% will be implemented on top of existing tariffs totalling 10% for Chinese manufactured models. The level of additional tariff imposed by the EU will be calculated based on the level of cooperation with an ongoing anti-subsidy investigation which is planned to be concluded in November 2024. The November 2024 deadline will form the definitive implementation of new tariffs, with a provisional tariff being implemented from July 2024.     

The level of tariff expected to be applied to major manufacturers ranges significantly, with the EU Commission stating co-operative companies will be assigned a 21% tariff while non-cooperative companies will be assigned the full 38.1% tariff. BYD is expected to be assigned an additional tariff of 17.4% on top of the existing 10% tariff, while Geely and SAIC are expected to see additional tariffs of 20% and 38.1% respectively. The Chinese government have stated that the implementation of new tariffs would damage EU-Chinese economic and trade cooperation, though the EU believes the new tariffs will combat excessive subsidies supporting Chinese manufacturers.

The new tariffs are only applicable for EV models manufactured within China which are shipped to and sold within the EU. This allows Chinese companies which manufacture EV models within the EU, which both BYD and Chery are looking to undertake, to escape these additional tariffs. Conversely, Western manufacturers with production centres in China such as Tesla and BYD will be eligible for these new tariffs if vehicles are sold into the EU. Ultimately, BYD and other major Chinese automakers will look to continue their momentum into the EU market through circumnavigation strategies with manufacturing or by accepting lower margins to retain market share. For BYD, an additional 17.4% tariff is not expected to impact too heavily, especially considering the low price point of its vehicles within the EU market. As a result, these new measures are not expected to substantially impact Chinese EV sales within the EU.