Here’s how the new EU tariffs will impact Chinese EV makers like BYD and NIO
After concluding that EVs imported from China have an unfair advantage due to government subsidies, the European Commission said it would impose additional tariffs by up to 38.1%. How will the new EU tariffs impact Chinese EV makers like BYD and NIO?
Why is the EU imposing new duties on China EV imports?
The EU launched an investigation into Chinese EV subsidies in October as imports climbed. “Global markets are now flooded with cheaper electric cars,” EU Commission President Ursula von der Leyen said in her annual speech to the European Parliament.
“And their price is kept artificially low by huge state subsidies,” the EU Commission leader added. The comments came as Chinese EV makers, like BYD, launched new models aimed at the region.
According to leading global auto data firm Jato Dynamics, the average retail price of imported Chinese EVs was 29% lower than models produced in Europe (excluding incentives and discounts).
As part of the investigation, the Commission concluded that EVs made in China benefit from unfair subsidization. In a press release Wednesday, the Commission said the unfair practice is “causing a threat of economic injury to EU and BEV producers.”
As a result, the EU pre-disclosed the additional tariffs it would impose on Chinese EV makers, including BYD.
How the new EU tariffs will affect BYD, NIO, and others
The Commission reached out to Chinese authorities to explore ways to resolve the issues and gather feedback. Meanwhile, the EU released individual tariffs that would apply to three sampled Chinese EV makers.
The additional tariffs would include:
- BYD: 17.4%
- Geely: 20%
- SAIC: 38.1%
Other EV makers in China, which cooperated with the investigation, would be subject to a 21% additional tariff.
According to the release, Tesla “may receive an individually calculated duty rate at the definitive stage.” Other companies can ask for an accelerated review.
Sampled companies can explain the accuracy of the EU’s findings. If no solution is found by July 4, 2024, the new tariffs will be made official.
Chinese foreign ministry spokesperson Lin Jian responded to the new tariffs (via Reuters), saying, “This anti-subsidy investigation is a typical case of protectionism.” He explained it would only damage trade relations and the global supply chain.
Several Chinese EV makers, including NIO, remain committed to expanding in Europe. NIO told CnEVPost, “In Europe, Nio’s commitment to the EV market remains unwavering, and we will continue to serve our users and explore new opportunities within Europe despite protectionism.”
NIO remains “hopeful for a solution” as the investigation has yet to be concluded. If imposed, NIO would be subject to the 21% weighted average tariff, which would be imposed on top of the current 10% import duties on EVs.
Electrek’s Take
As China’s EV market is becoming saturated with many EV producers, leaders like BYD, Geely, SAIC, and NIO look to expand into global markets.
With low-cost EVs, Chinese EV makers are quickly expanding in key global automakers. For example, BYD is already among the leading EV makers in Thailand, Brazil, Israel, and others.
In Brazil, BYD’s cheapest EV, the Seagull, starts at around $20,000 (99,800 BRL). In fact, the BYD Explorer No. 1, BYD’s car transport ship, landed in Brazil’s Port of Suape last week carrying 7,000 NEVS.
Even with the new tariffs, the BYD Seagull is expected to arrive as one of Europe’s most affordable EVs, starting under $21,500 (20,000 euros).
BYD’s car transport ship landed in Germany in February, unloading 3,000 NEVs into the European market.
According to Dataforce research, Chinese EVs like BYD accounted for 9% of EVs sold in Europe last year. That number is expected to rise rapidly over the next few years as low-cost EVs enter the market.
BYD’s CEO, Wang Chuanfu, called out the US and Europe for being “afraid” of Chinese EVs last week.
If you are not strong enough, they will not be afraid of you,” Wang said. BYD’s leader said the new EU tariffs are a testament to China’s auto industry strength. The comments came after the US increased tariffs on imports from China, including EVs, batteries, and minerals.
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Just after Tesla launched its ‘Full Self-Driving’ package, in China, the country announced that it cracking down on automated driving features with new limitations.
In February, Tesla launched a first version of its “Full Self-Driving” FSD package in China for owners with the latest “Hardware 4.0”, or “HW4”, vehicles.
Most of the features under Tesla’s FSD package have been limited to North America due to Tesla training its system for this market first and due to regulatory limitations in other markets.
Shortly after Tesla launched FSD in China, the American automaker had to pause its rollout due to updated requirements from China’s Ministry of Industry and Information Technology (MIIT).
Now, MIIT has confirmed that it held a meeting with automotive industry stakeholders yesterday, and it has further clarified the rollout of advanced driver assistance (ADAS) features.
CNEV reported on the meeting:
Car companies were asked to refrain from using words like “self-driving,” “autonomous driving,” “smart driving,” “advanced smart driving,” and instead use the term “combined assisted driving” to avoid misleading consumers, according to the minutes of the meeting.
Tesla had already changed the name from ‘Full Self-Driving’ to “Intelligent Assisted Driving” following the launch in China.
Based on a statement from MIIT, the meeting focused on enforcing the previously announced updated requirements that launched right after Tesla introduced FSD in China (translated from Chinese):
The meeting emphasized that automobile manufacturers must deeply understand the requirements of the “Notice”, fully carry out combined driving assistance testing and verification, clarify the system functional boundaries and safety response measures, and must not make exaggerations or false propaganda. They must strictly fulfill their obligation to inform, and truly assume the main responsibility for production consistency and quality safety, and truly improve the safety level of intelligent connected vehicle products.
Regulators want automakers to reduce the frequency of new software updates and instead focus on extended testing before releasing new updates.
The last few months have been quite chaotic for ADAS systems in China. Along with Tesla’s FSD release, several Chinese companies released their systems, including BYD, Xiaomi, and Huawei.
Xiaomi reported a fatal accident in which its ADAS system was active just seconds before the crash, and Tesla owners using FSD racked up thousands of dollars in fines due to FSD making mistakes.
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The Global Payments Company logo seen displayed on a smartphone.
Igor Golovniov | LightRocket | Getty Images
Global Payments shares tumbled 17% on Thursday after the company said it’s buying Worldpay for more than $24 billion while simultaneously selling its Issuer Solutions business to Fidelity National Information Services.
The company said that in acquiring Worldpay, which FIS had purchased in 2019 before later selling a majority stake, it’s expanding its reach and will be able to serve over 6 million customers across more than 175 countries, enabling $3.7 trillion in annual payment volume.
In selling its Issuer Solutions unit to FIS for $13.5 billion, Global Payments is divesting a unit for back-end financial processing that’s long been viewed as a stable provider of growth. In the end, Global Payments is going bigger in providing payments services to merchants, while FIS is focusing on issuer processing.
FIS bought Worldpay for about $35 billion in 2019 and sold most of its stake last year to GTCR.
Global Payments said on Thursday that it obtained committed bridge financing and plans to issue $7.7 billion of debt “to replace the bridge commitment and refinance Worldpay’s outstanding debt.”
Global Payments CEO Cameron Bready called it a “defining day,” and said the transaction gives the company “significantly expanded capabilities, extensive scale, greater market access and an enhanced financial profile.”
But Wall Street was less enthusiastic. While the acquisition gives Global Payments a larger footprint in payment processing, analysts at Mizuho described it as a strategic step backward.
Mizuho reiterated its neutral rating on the stock, warning that “the business could be seeing more meaningful margin pressure than investors acknowledge.” The analysts wrote that FIS won the trade, getting the “crown jewel” with Global Payments getting “more of the same.”
FIS shares rose more than 8% on Thursday.
Both deals are expected to close in the first half of 2026, pending regulatory approval.
The Tesla Cybertruck is in crisis. The automaker is still sitting on a ton of old inventory, which it is now heavily discounting, and it is throttling down production to try to avoid building up the inventory again.
When launching the production version of the Cybertruck in late 2023, Tesla CEO Elon Musk claimed that the vehicle program would reach 250,000 units a year in 2025:
“I think we’ll end up with roughly a quarter million Cybertrucks a year, but I don’t think we’re going to reach that output rate next year. I think we’ll probably reach it sometime in 2025.”
We are now in 2025, and Tesla is expected to currently be selling the Cybertruck at a rate of about 25,000 units a year – a tenth of what Musk predicted.
Earlier this month, we reported that Tesla began the second quarter with 2,400 Cybertrucks in inventory, valued at over $200 million.
This is a real problem for Tesla as many of those Cybertrucks are older 2024 model year units not eligible for the federal tax credit, and even some ‘Foundation Series’, which Tesla stopped building in October 2024 – meaning that Tesla is sitting on some 6-month-old trucks in some cases.
Tesla is now offering deeper discounts on the new inventory of Cybertrucks. The discounts can go as high as $10,000, but the average one is closer to $8,000, which is more than the tax credit:
Despite Tesla’s efforts, the automaker has only reduced its Cybertruck inventory by about 100 units since the beginning of the month.
Tesla is now further throttling down production of the Cybertruck at Gigafactory Texas, according to a new report from Business Insider.
According to two Tesla workers speaking with BI, the automaker has reduced its Cybertruck production teams and now operates at a fraction of its original capacity. It also moved some Cybertruck production workers to Model Y production at the plant.
One of the workers said:
“It feels a lot like they’re filtering people out. The parking lot keeps getting emptier.”
As we previously reported, Tesla has been operating all its factories at approximately 60% capacity to avoid building up excessive inventory amid lower demand.
When it comes to the Cybertruck program, it sounds like Tesla is lowering production even further.
Last week, Tesla launched a new version of the Cybertruck in an attempt to boost demand, but it has been poorly received due to the automaker’s removal of many essential features.
Electrek’s Take
There are a lot of other automakers that would have already given up on the Cybertruck ith these results, but not Tesla. Musk is not one to admit defeat easily.
However, Tesla is running out of options.
The new Cybertruck RWD was a desperate attempt, and I doubt it will work. Now, it sounds like Tesla is further throttling down production – virtually confirming that the new trim didn’t help.
The next step would be a complete production pause.
Again, I don’t think Musk wants to admit defeat, but at some point, it’s inevitable.
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