Tesla, BMW take EU to court over China EV tariffs

Elon Musk's Tesla and German auto giant BMW have challenged EU import tariffs on China-made electric vehicles at the bloc's top court, the European Commission said Monday.

The carmakers -- which both manufacture EVs in China -- followed challenges filed with the Court of Justice of the European Union (CJEU) by Chinese automakers BYD, Geely and SAIC against the extra tariffs of up to 35 percent.

"We take note of these cases and we look forward to defending ourselves in court," commission spokesman Olof Gill told AFP.

Brussels imposed the extra tariffs on Chinese-made electric cars at the end of October after an anti-subsidy investigation concluded Beijing's state support was unfairly undercutting European automakers.

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The move came as Europe's car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles (EV) and increased competition in key market China.

But BMW said the duties "do not strengthen the competitiveness of European manufacturers" and it had thus filed the lawsuit seeking an "annulment of this regulation" in order to "protect its interests".

"The countervailing duties harm the business model of globally active companies, they limit the supply of e-cars to European customers and can therefore even slow down decarbonization in the transport sector," the German automaker said in a statement.

The EU tariffs followed a more radical US approach that saw former president Joe Biden quadrupling import tariffs on EVs from China to 100 percent, as part of a package of hikes having accused Beijing of "cheating" rather than competing.

Beijing has consistently denied its industrial policies are unfair and has lodged a complaint with the World Trade Organization about the EU tariffs.

It later imposed "anti-dumping measures" on brandy imported from the bloc, in what appeared to be a tit-for-tat measure.

Under the EU tariff scheme, Tesla vehicles manufactured in Shanghai face an additional surcharge of 7.8 percent on top of 10 percent already in place for EV imports from China.

BYD similarly faces a 17 percent surcharge, Geely 18.8 percent and SAIC 35.3 percent.

- Growing share -

The German government was one of five EU member states that opposed the measures, fearing retaliation against its own manufacturers.

The country's automotive flagships, including BMW, are strongly established in China, where they produce certain models, including for the European market.

Similarly, US automaker Tesla produces its famous Model 3 in its Shanghai factory and exports it to Europe.

BMW said it hoped a political agreement could be sought through negotiation, adding that it was "important to avoid a trade conflict that only has losers in the end."

Tesla-owner Musk is a key ally and adviser to US President Donald Trump, who has sent trade tensions soaring worldwide since being elected in November by threatening to impose extra customs duties on allies and rivals including the EU and China.

The complaints by the five manufacturers were filed with the General Court, the lower CJEU chamber, last week.

They are listed on the website of the Luxembourg-based institution, which does not provide any other detail.

Gill confirmed to AFP they concerned the EU's new customs duties.

Europe's auto sector employs more than 13 million people and accounts for about seven percent of the 27-nation bloc's GDP.

The market share of Chinese electric cars has ballooned in the EU in recent years, 14 percent in the second quarter of 2024, up from less than 2 percent in 2020.

The share of Chinese-built vehicles, including those manufactured by foreign brands like Tesla, similarly rose to 27.2 percent from 3.5 percent over the same period.

European automotive CEOs and EU officials are expected to discuss the sector's troubles on Thursday in the first meeting held under a new initiative chaired by EU chief Ursula von der Leyen.