The European Commission is poised to levy countervailing duties of up to 38.1 percent on imports of battery electric vehicles (BEVs) from China. Based on provisional findings from its ongoing investigation, the Commission has determined that China's BEV value chain benefits from unfair subsidization.
This subsidization poses a risk of economic harm to BEV manufacturers within the European Union, according to the Commission. The formal anti-subsidy investigation into Chinese BEV imports was initiated on October 4, 2023, and is scheduled to conclude by November 4, 2024.
The Commission has pre-disclosed the potential provisional countervailing duties, which it intends to impose within nine months of initiating the investigation, by July 4, 2024.
Specific duties would be applied to Chinese manufacturers: 17.4 percent for BYD, 20 percent for Geely, and 38.1 percent for SAIC. Other Chinese BEV producers who cooperated but were not sampled will face a weighted average duty of 21 percent. Those who did not cooperate will incur a residual duty of 38.1 percent.
These duties are expected to be enforced within four months following the imposition of the provisional duties. The Commission is currently engaging with Chinese authorities to discuss these findings and to seek a WTO-compliant resolution.
If these discussions do not yield an effective solution, the provisional duties will be enforced starting July 4, 2024. These duties will only be collected if definitive duties are imposed before November 4, 2024.
Tesla, a US-based EV manufacturer with operations in China, has requested an individually calculated duty rate, and the Commission indicated that other companies can also request an accelerated review to determine their duties.
The pre-disclosure of these provisional duties has been communicated to all stakeholders, including the Chinese government, Chinese companies, and EU Member States. Its purpose is to inform the market about the forthcoming measures.
These duties will be in addition to the standard 10 percent import duty. The goal of imposing these duties is to ensure fair competition between the EU and Chinese industries, rather than to bar imports into the EU market.
China's heavily subsidized BEV value chain presents a significant and imminent threat to the EU industry, necessitating these protective measures.
