Punitive tariff: Will an EV from China soon no longer be a bargain?

The EU Commission has presented evidence that the Chinese government is investing large sums in the production of EV. In order to prevent the excessive market power of electric cars from China and competitive disadvantages for Western manufacturers in Europe, punitive tariffs are now being planned.

Punitive tariffs on EV to be paid retroactively?

The EU Commission has been keeping a close eye on Chinese electric car production since the fall of 2023. As part of an investigation, the responsible authorities were tasked with examining possible distortions of competition by car companies from the Far East. These are allegedly receiving high subsidies from the state apparatus in order to be able to offer their own cars at really competitive prices in our regions. The result is now clear. The Commission itself says that it has gathered the necessary evidence. And what follows from this?

As part of an implementing regulation issued on March 5, 2024, the Commission has now ordered the registration of Chinese-made e-cars. This could result in expensive punitive tariffs, which is unlikely to please buyers of the vehicles. Some buyers are likely to be affected by the regulation. Finally, a look at the Commission’s figures shows that the number of e-cars imported from China in the period from October 2023 to January 2024 rose by 14% year-on-year (Oct. ’22 to January ’23) to 177,839 vehicles.

Cautious warning against buying Chinese makes

If you have just bought an NIO or BYD, you do not necessarily have to expect to pay a penalty duty. However, there is a risk. Legally, it is possible for the Commission to introduce a corresponding punitive duty if at least nine months have passed since the start of the investigation. As the investigation started in October 2023, the duty may therefore be introduced in July 2024 at the earliest. However, it may be applied retroactively for up to 90 days, which would theoretically also affect purchases made in April 2024. This is stated in Article 16, paragraph 4 of EU Regulation 2016/1037.