The European Commission (EC) has decided to impose additional tariffs of up to 38% on Chinese EVs following preliminary results of its anti-subsidy investigation, which found that prices are being distorted by Chinese state support.

Duties imposed will differ for each OEM, with three of the major Chinese EV makers sampled and singled out for specific tariffs. If an agreement is not reached with Chinese authorities on an effective solution for the subsidisation, from July 4 the commission would apply an additional tariff of 17.4% on BYD, 20% on Geely and 38.1% on SAIC. Tesla may also receive an individually calculated duty rate when definitive tariffs are imposed.

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The decision comes after fears that Chinese manufacturers are “dumping” cheap EVs on already struggling market. However, the Chinese are already planning for this, with the likes of BYD set to open a plant in Hungary within the next 3-4 years, and Chery, MG and others expected to follow suit.

“We note the European Commission’s decision to impose provisional duties on Chinese-built EVs in a matter of weeks. We will monitor carefully for any adverse impact on the UK market and domestic manufacturers as we await the findings and definitive measures,” said Mike Hawes, chief executive, Society of Motor Manufacturers and Traders (SMMT).

“Free and fair global trade has driven the UK’s success as one of the world’s leading automotive markets and exporters,” Hawes added. “Securing our own competitiveness is therefore our most immediate priority, and we loot to whoever forms the next government to deliver a long-term strategy, supporting a vibrant market and manufacturing base that allows the sector to thrive on a level playing field.”