The European Commission announced plans to impose an additional 9% tariff on Tesla electric vehicles made in China, far lower than the level of tariffs Chinese companies may face because Tesla receives fewer subsidies from China than domestic manufacturers.
Musk’s China-made Tesla – which makes the Model 3 and Model Y in China – had asked Brussels to set a specific tax rate for it, and the Commission ultimately decided to set a 9% tariff for it because Tesla received fewer subsidies from China than domestic manufacturers.

The main interests taken into account include battery supply below market value, land use rights below market value, and various Chinese subsidies to export companies.

The European Commission also decided that European manufacturers involved in Chinese joint ventures and exporting electric vehicles from China will apply the tax rate of their Chinese partners.

European companies affected include Germany’s Volkswagen and BMW, which are worried that EU tariffs may damage trade relations with China because they have important business interests in China.