Tesla's exclusion, 'self-imports', small market share: China's objections to EU EV tariffs

China says the European Union's decision to impose additional tariffs on imports of electric vehicles is unacceptable and a source of "great regret".

The country's Commerce Ministery in Beijing issued a statement condemning the measures and disputing their validity.

The European Union published on Tuesday the final conclusions from its investigation.

It justifies its decision on the grounds that Chinese carmakers benefit from state support.

It says that this support means they can undercut European companies.

However, the document also sets out how virtually all of the findings were vigorously contested on a wide variety of grounds. Most of the report's 277 pages are dedicated to attempts to rebut challenges from China's government and industry to the fairness of the investigation and the logic behind its conclusion.

EU investigators chose to reject at least 300 points made by the Chinese side, with around half a dozen minor arguments being accepted, according to the document. 

Here is a summary of a few of those points.

Tesla

The EU gave the lowest rate of import duties to Tesla, despite it being the biggest of the importers from China to the EU. Its more expensive vehicles were also excluded from calculations regarding the overall pricing of Chinese EVs.

Chinese companies said this was unfair.

'Self-imports'

The EU concluded that the future of its carmakers was threatened by Chinese imports.

The Chinese side pointed out that much of the EU industry was importing its own models from China and therefore benefiting from the same advantages as Chinese brands. Only around 30 percent of imports are Chinese models. If Chinese imports were harming EU companies, a high proportion of this damage would therefore be self-inflicted.

Different models

The EU said that Chinese vehicles were outcompeting European models because of their lower prices. It claimed there is a 90 percent match between the kinds of cars imported and those made in the EU.

Chinese carmakers challenged this figure and said they tended to specialize at the lower end of the market, while European counterparts offered more luxury EVs. They said this also could explain the price gap.
 

No complaint

The EU decided to open the investigation despite not being alerted by any European companies to a problem. It said its future projections for Chinese imports meant swift action was required. Initiating this kind of probe legally requires definitive evidence. 

The Chinese carmakers argued that such evidence was not present and that the EU had relied on media reporting and results of large and complex companies with little dependency on electric vehicles. 

EU price rises

A key point in the EU's case is that Chinese imports would constrain local companies' ability to raise prices and therefore invest in moving to more EV production. However, prices for EU-made electric vehicles rose 38 percent between 2020 and 2024. The EU said this was because of changes in the product mix and that it still did not cover the additional costs of manufacturing. This was challenged by one company which claimed production costs had risen by just 24 percent.

EU companies dominate

The EU investigation found that its industry was unable to compete with Chinese carmakers.

However, China pointed out that almost two thirds of all electric vehicle sales in the European Union are cars made within the bloc. Chinese branded imports were 7.3 percent. 

Unfair comparisons

The EU listed a number of ways that carmakers in China benefited from state support.

But the Chinese government and businesses objected to the methods the EU used to establish this. For instance, they said that investigators had assumed Chinese car makers were less creditworthy in order to suggest that they were paying lower interest on loans than they should have done. The report also uses land prices on the island of Taiwan to calculate whether mainland businesses had been given advantageous deals. 

The Chinese companies said the comparison was inaccurate given the population density and relative land scarcity on the island. 

Vertical integration

The EU said that China's cost advantage was a result of state support.

However Chinese companies suggested a number of other reasons why they could manufacture more efficiently - for example because, unlike in Europe, a number of Chinese car companies control large parts of their own supply chains.