The European Union on Tuesday said planned tariffs on Tesla vehicles being imported from China would be cut to 9% from 20.8%, while also reducing a number of planned import duties on other electric vehicle firms.
In June, the E.U. said it would slap higher tariffs on Chinese electric vehicle imports, which it found benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to EV producers in Europe.
The European Commission, the executive arm of the E.U., announced a preliminary conclusion that the battery-electric vehicles value chain in China “benefits from unfair subsidisation” and pronounced that it is in the E.U.’s interest to impose “provisional countervailing duties” on BEV imports from China.
The E.U. Commission disclosed on Tuesday its draft decision to “impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China.”
The regulatory body said that after receiving comments from interested parties on its planned tariffs, it would make a “slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures.”
Electric vehicles made by Tesla in China will now face duties of 9% on imports to the E.U. That is down from an anticipated rate of 20.8%, which the E.U. signposted in an earlier decision in July.
Tesla shares rose more than 1% in U.S. morning trading following the E.U.’s draft decision.
The E.U. said it made the decision to grant Tesla its own lowered individual duty rate as an exporter from China.
It comes after Elon Musk’s electric vehicle maker made a “substantiated request” to the E.U. that planned tariffs on its China-made EVs be recalculated to reflect specific subsidies the company receives in China.
Tesla was not immediately available for comment when contacted by CNBC on Tuesday.
BYD, the Warren Buffett-backed EV firm, saw its tariff rate reduced from 17.4% to 17%; Geely from 19.9% to 19.3%, SAIC from 37.6% to 36.3%. BYD, Geely and SAIC did not immediately respond to a request for comment outside of working hours in China.
Other companies cooperating with the E.U. in its investigation into China’s heavy subsidization of EVs, will face tariffs of 21.3%, the commission said. This is higher than the 20.8% rate cooperating companies would have faced under the E.U.’s previous July decision.
For those not cooperating, they will be slapped with 36.3% import duties. That is down from 37.6% previously.