Both BMW and Tesla have been hit with tariffs by the EU on imports of electric vehicles made in China, along with other Chinese manufacturers such as BYD and SAIC.
BMW and Tesla Shanghai have announced that they are suing the European Commission due to tariffs implemented by the EU on imports of electric vehicles from China. The two companies are the latest to join a growing number of Chinese car makers, including Geely, SAIC and BYD, who are also against these tariffs.
Tesla’s shares fell 2.32% on Tuesday afternoon; BMW’s shares fell 0.35%.
BMW and Tesla Shanghai both filed cases at the European Union’s Court of Justice but further details have not been revealed.
Last year, the EU imposed a tariff of 7.8% on electric vehicles made by Tesla in China, while BMW’s China-produced EVs were hit with a 20.7% tariff. Similarly, Chinese EV manufacturers such as Geely have received a tariff of 18.8%, whereas the EU tariff for BYD is 17%, with SAIC having a levy of 35.3%. This is on top of the normal 10% tariff on all car imports to the bloc.
BMW has highlighted that these tariffs do very little to strengthen the competitiveness of domestic European car companies.
A BMW spokesperson said, as reported by The Wall Street Journal: “On the contrary, the countervailing duties harm the business model of globally active companies, they limit the supply of e-cars to European customers and can therefore even slow down decarbonisation in the transport sector.”
However, the company said that it was still open to negotiating an agreement. BMW also reiterated the importance of avoiding trade conflicts between key global parties, as they often result in losers on all sides.
The European Commission has revealed that the bloc will stay open to negotiation, as long as the agreed-upon solution takes into account the unfair competition discovered by EU investigations.
If successful, the lawsuits could potentially strip Brussels of the right to impose tariffs on Chinese products, by annulling the relevant law, and allowing affected companies to fight for loss claims.
Euronews has contacted both Tesla and BMW for comment.
Car manufacturers continue to struggle with rising Chinese competition
One of the main reasons for the EU imposing tariffs on imports of Chinese electric vehicles into the bloc was rising concerns about the Chinese government unfairly subsidising domestic manufacturers. This, in turn, allowed them to sell their products at cutthroat prices in the European market, undercutting European car companies.
In its investigations, the EU has found that these subsidies include cheaper land, softer loans, as well as subsidies for various key suppliers such as steelmakers.
However, several Chinese EV makers are now focusing on hybrid vehicles in order to continue expanding in the European market, as these are not covered under the current tariffs. This has led to increased fears of the EU’s EV tariffs becoming less effective.
European car makers have been rapidly losing market share to Chinese companies, as these offer better prices, discounts, features and designs. The ongoing cost of living crisis seen across many parts of Europe has meant that consumers are slower to make big purchases, while also being on the hunt for better bargains.
