Tesla joins court challenges to EU tariffs on Chinese EVs

The company imports a large number of cars into Europe from its Shanghai factory, leaving it exposed to tariffs

Records at the website of the European court of justice showed that Tesla (Shanghai) filed its case at the commission at the court last Wednesday. File Picture: David Zalubowski/AP

Tesla has filed a complaint against the European Commission after the imposition of tariffs by the bloc on its Chinese-made electric vehicles (EVs).

The EU announced its decision to impose tariffs on all imports of Chinese electric cars in June, alleging that the Chinese government had provided unfair state subsidies to manufacturers in order to win a dominant position in the emerging industry. EU leaders approved the tariffs in October.

Records at the website of the European court of justice showed that Tesla (Shanghai) filed its case at the commission at the court last Wednesday. It gave no further information.

Tesla, led by chief executive Elon Musk, makes cars in Berlin and in its home US market. However, it still imports a large number of cars into Europe from its Shanghai factory, leaving it exposed to tariffs. 

The carmaker is due to pay significantly lower tariffs at 7.8% than some competitors, who will face up to 35.3%.

Financial backer

The case will mean that the main company controlled by Mr Musk will be fighting a legal case against the EU at the same time as the billionaire serves as one of the most prominent financial backers of US president Donald Trump.

Mr Musk, who was the biggest individual donor to Mr Trump’s election campaign, has been appointed to run a new advisory department of government efficiency — also referred to as Doge, after a meme featuring a shiba inu dog.

Mr Musk has in the past year become a vocal critic of the EU — criticising the commission as “undemocratic” — and individual member state governments. On Saturday, he appeared via video link at a campaign event for Alternative für Deutschland — a far-right political party in Germany.

Adding to the web of potential conflicts of interest, the EU is investigating Mr Musk’s social network, X, over alleged failure to limit election interference — most notably in Romania’s recent election.

Despite Mr Musk’s support of Mr Trump, who has said he will implement steep tariffs on all Chinese exports to the US, a successful appeal against the EU tariffs could directly benefit Chinese manufacturers.

However, several German carmakers — which have joint-ventures in China — have also criticised the EU tariffs, arguing instead for free trade, which would allow them to continue to sell to the enormous Chinese market. 

Germany’s BMW, the Chinese electric vehicle makers BYD, Geely, and SAIC, and the auto-sector body CCCME have also challenged the EU’s import tariffs at the court, according to Reuters.