Tesla to get lower EU tariff on its Chinese-made EVs

The European Union has slashed its planned extra tariff on Tesla electric vehicles imported from China by more than half, the bloc's executive said on Tuesday, following further investigations requested by the company.

The European Commission also revised its proposed punitive duties on imports of Chinese-made EVs in draft findings, in the highest profile EU investigation of alleged Chinese subsidies, which has provoked threats of retaliation from Beijing.

It set a new reduced extra rate of 9% for Tesla, lower than the 20.8% it had indicated in July, and said some Chinese companies in joint ventures with EU automakers may also receive lower planned punitive duties on Chinese-made EV imports.

The tariffs are on top of the EU's standard 10% duty on car imports, a measure the Commission says is aimed at levelling the playing field and countering what it says are unfair subsidies.

Tesla had requested a recalculation of its rate, to be based on the specific subsidies the company had received. The Commission said on Tuesday it had verified that it received less subsidies from the Chinese government compared with the country's EV makers which Brussels had investigated.

The Commission, which sets EU trade policy, said it still believed Chinese EV production has benefited from extensive subsidies and proposed duties on other companies of up to 36.3% - slightly lower than the maximum initial planned duty of 37.6% set in July for companies that did not cooperate with the EU's anti-subsidy investigation.

China's commerce ministry said in response it is "firmly opposed to and highly concerned" about the findings, and vowed to take all necessary measures to protect Chinese firms.

The draft findings were based on "facts unilaterally determined by the EU side, not on facts mutually agreed upon," the ministry said in a statement.

China hopes the EU side will expedite the exploration of proper solutions in a rational and pragmatic manner, and take practical actions to avoid the escalation of trade frictions, it added.

Beijing launched a challenge at the World Trade Organization earlier this month.

LOWER DUTIES

Tesla was among the companies classed as cooperating with the EU investigation. It did not respond to a request for comment on Tuesday.

The Commission said three companies it had sampled would each receive slightly lower provisional duties than indicated in July. China's BYD would face a rate of 17.0% from 17.4% levied in July, Geely 19.3% versus 19.9% and SAIC 36.3% from 37.6%.

Chinese firms in joint ventures with EU producers may also be eligible for the lower duties planned for the Chinese companies in which they are integrated, the Commission said.

(Reporting by Philip Blenkinsop, Kate Abnett, Sudip Kar-Gupta, Benoit Van Overstraeten, and Victoria Waldersee; Editing by Emelia Sithole-Matarise and David Holmes)