Chinese EVs hit as Europe puts up import tariffs

New York-listed Chinese electric vehicle stocks took a hit on Wednesday after the European Union announced new import tariffs to protect European car makers.

Tesla, BYD, and NIO shares fell in early trading but stabilised as the day progressed - with Tesla, in particular, rallying close to 5% higher to reach $178.92.

The EU claims Chinese vehicles benefited from unfair subsidies that distort competition.

It now intends to impose a 38% tax on non-cooperative companies and a 21% fee on other Chinese car makers. Meanwhile, other EV firms will be given specified rates with BYD due to incur 17%, Geely’s will be 20%, and SAIC it will be 38%.

Tesla’s import tax rate is still to be decided – while it is an American company and has a factory in Germany, Tesla also exports vehicles into Europe from a plant in Shanghai.

Initial reaction from market analysts suggests Chinese EV firms can still sell profitably in Europe even with a 30% tariff, though they would squeeze margins and drive prices higher.

Europe isn’t acting alone. Turkey is imposing a 40% tariff, whilst US President Joe Biden last month took an aggressive stance proposing a tariff on Chinese car imports of 100% (and, currently, no Chinese-branded vehicles are currently sold in the US).