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Tesla is stepping into the legal ring with the European Union over fresh tariffs on electric vehicle imports from China. Recently, the European Court of Justice confirmed the case launched by Tesla’s branch in Shanghai, although details remain sparse for now.
With Tesla joining the mix, they’re not alone—Germany’s BMW and several Chinese automakers are also challenging the EU’s move. The backdrop? Anti-subsidy tariffs announced in October: Tesla faces a 7.8% tariff, while others could see up to a 35.3% hike, adding to the existing 10% standard tariff on imports.
This is yet another chapter in the ongoing saga between the EU and Elon Musk, Tesla’s head honcho and noted adviser to former US President Donald Trump. Musk, who has not shied away from criticism over EU tech regulations, also threw his support behind Germany’s right-leaning political party, Alternative for Germany, during their election campaign.
Interestingly, despite Musk’s political moves, Tesla’s new registrations in the EU dipped by 13% in 2024, reaching 242,945 vehicles according to Acea, the European auto industry association. While Musk’s outspoken nature might discourage some potential buyers, it seems to resonate with others.
In 2023 alone, around 20% of electric cars sold in the EU, translating to roughly 300,000 vehicles, were manufactured in China. Transport and Environment, a noted consultancy, revealed that Tesla made up 28% of these imports—topping the charts over other brands.
The EU’s trade probe highlights support through soft loans, advantageous land deals, and supplier subsidies like those for steelmakers, though Tesla earned the smallest tariff because it took the least advantage of these benefits.
Olof Gill, the European Commission’s trade spokesperson, addressed the challenge from BMW and others last week, expressing confidence: “We’re ready. We’re a rules-based club here in the EU. If they want to take us to court, they can take us to court.”
The precise arguments from Tesla remain under wraps as the case heads to the General Court, the EU’s second-highest judicial body, with potential appeals to the ECJ. Settling the legal tussle might stretch over an 18-month timeline.
Meanwhile, Tesla’s brass are strategizing to shift their import dynamics from China in light of the EU tariffs. Currently, Model 3 cars are exported from Shanghai, whereas Model Y production is underway in Berlin.
