
Tesla has filed a legal challenge against the European Commission regarding new tariffs on electric vehicles produced in China. The case was brought by Tesla’s Shanghai division to the European Court of Justice, targeting measures imposed by the EU last year to counter Chinese subsidies in the electric vehicle industry.
The EU implemented these tariffs in October 2024, arguing that state support in China allowed its manufacturers to sell EVs at significantly lower prices, harming European competitors. The tariffs range from 7.8% for Tesla to as high as 35.3% for other manufacturers, in addition to the bloc’s standard 10% import tariff.
Tesla’s move follows similar legal actions by other automakers, including BMW and Chinese manufacturers like BYD and Geely. BMW criticized the tariffs, saying they restrict EV availability in Europe and complicate efforts to reduce emissions. The company argued for negotiated solutions rather than trade barriers, warning that an escalating dispute could harm all parties.
Elon Musk’s recent political activities have added to the tension. Musk, who has been critical of EU policies, recently appeared at a campaign event for Germany’s Alternative für Deutschland (AfD) party, a move that drew backlash from European leaders. This lawsuit against the EU comes as his company faces broader scrutiny in Europe, including an investigation into Musk’s social media platform X over alleged failures to combat election interference.
The EU defended its decision, citing an investigation that revealed extensive state subsidies in China, such as free land, low-interest loans, and tax incentives for battery production. These advantages, according to Brussels, created an uneven playing field that jeopardized the future of Europe’s EV industry.
In 2023, Tesla accounted for 28% of Chinese-made EV imports into Europe. While it faces the lowest tariff among importers, Tesla’s reliance on its Shanghai facility for European deliveries makes it vulnerable to the new trade barriers.