The European Commission (EC) unveiled on Tuesday its draft decision on definitive countervailing duties on battery electric vehicle (BEV) imports from China, Kallanish reports.

Carmakers received the proposed additional tariffs they will be subject to, and now have 10 days to provide comments. Interested parties can also request hearings with the EC “as soon as possible.”

The decision follows an anti-subsidy investigation officially started on 4 October 2023. Temporary duties, on top of the existing 10% import tariff, entered into force on 5 July 2024. If approved in an upcoming vote by member states, definitive countervailing duties will be imposed on 5 November for a five-year period.

Based on “substantiated comments” received from carmakers on the provisional measures, the EC has slightly adjusted the proposed rates downwards. They range from 17% to 36.3%, instead of the original maximum rate of 38.1%.

However, US EV maker Tesla has received a much lower rate than peers. This “individual duty rate” of 9% was granted as an exporter from China. This means Tesla’s BEV models shipped from its Shanghai gigafactory will only be subject to a total 19% import duties.

In comparison, BYD vehicles are subject to 27%. Other cooperating companies, which the EC has not publicly disclosed, will face total tariffs of 31.3%. “Non-cooperating” companies such as SAIC, the parent company of MG Motors, are facing the harshest combined rate of 46.3%.

China Chamber of Commerce to the EU (CCCEU) expressed its “strong dissatisfaction and firm opposition to the EC’s protectionist approach.” The group argues the development of the European EV industry, along with the EC’s own report, “shows that there is no sufficient evidence to demonstrate that China’s BEVs cause substantial material injury in the EU market.”

“The EC’s unfair use of trade tools to hinder free trade in electric vehicles, along with this protectionist approach, will ultimately weaken the resilience of the European electric vehicle industry, disrupt the level playing field, and undermine the EU’s own green transition,” it adds.

The move will also exacerbate trade tensions between China and the EU, but the EC doesn’t see it impacting the ongoing procedures in the World Trade Organisation (WTO). Beijing says the EU has not followed WTO trade rules and has initiated a dispute consultation.