The European Union has initiated the application of supplementary tariffs on electric vehicles imported from China, a policy that commenced in 2024. Despite this general imposition, the regulatory framework of the EU allows car manufacturers to engage in negotiations for specific tariff waivers applicable to particular electric vehicle models brought in from China. This flexible approach was notably demonstrated in February 2026, when the European Commission granted Volkswagen's Cupra brand an exemption for its China-produced Tavascan SUV coupe, contingent upon adhering to a minimum price and an annual import quota.
This precedent has sparked interest among Chinese automotive companies, which are now exploring similar arrangements for their EV models destined for the European market, as indicated by the China Chamber of Commerce to the EU. The EU's initial tariff proposals on China-made electric cars, including those from Tesla, were subsequently adjusted downwards, and rates for other manufacturers were slightly reduced. These revisions followed comprehensive submissions from the companies involved in the anti-subsidy investigation, highlighting a dynamic and responsive trade policy environment. These new tariffs are in addition to the existing standard 10% import duty on automobiles.
Various Chinese and international automotive groups face different additional countervailing duties. For instance, BYD Group companies are subject to a 17% duty, while Geely Group entities face 18.8%. SAIC Group companies encounter the highest duty at 35.3%. Tesla, after requesting an individual assessment, was assigned a 7.8% duty, recognizing its cooperation in the investigation. Other cooperating companies, including Aiways, Anhui Jianghuai, BMW Brilliance, Chery, China FAW, Chongqing Changan, Dongfeng, Great Wall Motor, Leapmotor, Nanjing Golden Dragon Bus, NIO Holding, and XPeng Inc, are assessed at 20.7%. All other companies not specifically listed face a 35.3% duty. The European Commission's approval of a 0% duty for Volkswagen's Cupra Tavascan SUV coupe, based on a minimum price and import quota, underscores the potential for strategic negotiations within this new tariff structure.
This evolving trade relationship between the EU and China, particularly concerning electric vehicles, reflects a nuanced approach to global commerce. It underscores the importance of fair competition while also fostering innovation and environmental sustainability. By establishing clear, albeit flexible, guidelines, the EU aims to create a level playing field for all automotive players, ultimately benefiting consumers through diverse and competitive market offerings. This framework encourages continuous dialogue and adaptation, promoting a future where economic growth and environmental stewardship are pursued collaboratively.