Tesla, the electric vehicle (EV) maker, has initiated legal proceedings against the European Union over the imposition of additional tariffs on EVs manufactured in China. The United States-based automaker, owned by Elon Musk, joins a series of legal challenges filed by industry players, including German automaker BMW and Chinese manufacturers BYD Auto, SAIC Motor, and Geely.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products has also contested the EU’s tariffs, while the Chinese government has taken the matter to the World Trade Organization.
The European Court of Justice confirmed Tesla’s lawsuit on Monday. Commenting on the matter, EU trade spokesperson Olof Gill told Agence France-Presse: “We take note of these cases and we look forward to defending ourselves in court as necessary.”
The dispute stems from the EU’s introduction of new tariffs in late October, adding a 7.8 percent duty on Tesla’s China-made vehicles, alongside tariffs of up to 35.3 percent on other Chinese-manufactured EVs. These levies are in addition to the existing 10 percent standard import tariff on EVs entering the EU. The bloc justified the move by citing what it considers unfair subsidies benefiting Chinese EV manufacturers, including low-interest loans, cheap land, and supplier discounts—claims that China has categorically denied.
Tesla’s lawsuit will first be heard by the EU’s General Court, with any verdict subject to appeal before the European Court of Justice. The legal proceedings are expected to take around 18 months to conclude.
This development coincides with increasingly strained relations between the EU and Musk. The billionaire entrepreneur has publicly criticized the bloc’s regulatory efforts on internet activity and has drawn controversy for his political affiliations, including his support for Germany’s far-right Alternative for Germany party. Some analysts suggest Musk’s political stance may have impacted Tesla’s European performance, with the brand’s sales in the region falling by 13 percent in 2024 to 242,945 units, according to the European Automobile Manufacturers Association. Notably, 28 percent of all Chinese-made EVs imported into the EU in 2023 were Teslas.
The case also aligns with broader concerns over Chinese-made EVs in the European market, as around 300,000 units, roughly one-fifth of all EVs sold in the EU—were manufactured in China. Beyond the EU, Tesla is also lobbying the Canadian government to eliminate its newly introduced 100 percent tariff on EVs imported from China.
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