According to foreign media reports, on 20 August, the European Commission released a draft final decision on the results of the investigation of China’s countervailing duties on electric vehicles, and adjusted some of the proposed duty rates.
According to the EU’s latest plan, will not cooperate with the EU countervailing investigation of the company to add a maximum of 36.3% tax rate, lower than the maximum temporary tax rate of 37.6% set in July; other companies with the investigation (such as Dongfeng Automobile and Weilai Automobile, etc.) generally add a tax rate of 21.3%. In addition, all three Chinese companies that the EU had previously sampled will have slightly lower provisional rates, with BYD’s tariff rate falling to 17 per cent from 17.4 per cent previously, Geely’s tariff rate falling to 19.3 per cent from 19.9 per cent previously, and the rate imposed on SAIC falling to 36.3 per cent from 37.6 per cent previously.
The European Commission also said that Chinese firms that form joint ventures with EU carmakers may also be eligible for lower rates, rather than having the highest rates automatically applied, and that no retroactive tariffs would be imposed on them. For example, the EU reduced the additional rate to 21.3 per cent for the electric MINI produced by BMW Group’s Chinese joint venture, Beam Motors, and a lower tariff of 21.3 per cent will apply to the CupraTavascan model produced in China by Volkswagen Group’s brand, Seat, through its Volkswagen Anhui joint venture.
Tesla is listed among the companies cooperating with the EU’s investigation, in which the tariff rate on domestically produced cars exported to the EU will also be reduced, sharply down to 9 per cent from the previous 20.8 per cent. Previously, Tesla had petitioned the EU to recalculate its tariff rates based on specific subsidies the company receives. The European Commission confirmed on 20 August that Tesla receives fewer subsidies from the Chinese government than other Chinese electric car makers under investigation by the EU, and as a result, the company’s tariff rates on its Chinese-made cars exported to the EU are the lowest of all car makers.
It is worth noting that the said tariff rates are in addition to the previously existing 10 per cent tariff.
Following the publication of the draft on 20 August, carmakers can request a hearing and submit comments within 10 days. The European Commission will then submit a ‘final decision’ to EU member states, which will then vote on the regulation. The Commission’s draft will be implemented unless a qualified majority (15 EU member states representing 65 per cent of the EU population) votes against it.
The final regulation is scheduled to enter into force on 30 October and will be valid for five years.
In response to the latest EU draft decision, China’s Ministry of Commerce (MOFCOM) expressed its ‘resolute opposition and great concern’, saying that the draft findings were based on ‘facts unilaterally determined by the EU, not those agreed by the two sides’, and that China would take all necessary measures to protect Chinese China will take all necessary measures to protect Chinese enterprises.
Chinese carmakers have lost market share in the EU since the EU imposed temporary tariffs in July. According to a recent estimate by Moritz Schularick, director of Germany’s Kiel Institute for The World Economy, the tariffs could cut China’s car exports by a quarter, to a value of around $4 billion.