Tesla prepares for European Union EV tariffs with price increase

European Union (EU) has announced tariffs on electric vehicles (EVs) imported from China and Tesla is preparing for this situation with a price increase.

A notification published on the official Tesla Germany website confirmed that the company expects to increase Model 3 price due to import tariffs. The new prices could come into effect starting July 1, 2024.

“We expect a price increase starting July 1, 2024, due to additional import duties,” wrote the company. However, it didn’t reveal how much the price would add to the EV. The carmaker has listed three models in Europe including

1. Long Range Rear Wheel Drive (RWD) at 40,000 euros
2. Long Range All Wheel Drive (AWD) at 49,990 euros
3. Performance All Wheel Drive (AWD) at 56,990 euros

The price will remain the same for customers who take delivery of these models by June.

Tesla Model 3 Price Increase Notification in Germany (Source – Tesla Germany)

EU on Wednesday announced higher tariffs on Chinese EVs based on an investigation that led to “heavily from unfair subsidies” and pose a “threat of economic injury” to EV makers from China. The new tariffs will be introduced from July 4 ranging up to 38.1 percent tariff on battery-electric vehicle producers who did not cooperate with this investigation which started in October last year.

A lower 21 percent duty will be imposed on carmakers who somewhat comply with the EU. China’s BEV giant BYD will have to pay a 17.4 percent tariff, and Geely 20 percent. China’s SAIC will have to pay a 38.1 percent tariff on imports.

Tesla sells its Model 3 in China for local and overseas markets, especially in Europe. Therefore, its imported vehicles are subject to tariffs under new rules.

However, EU’s trade commissioner Valdis Dombrovskis said that the US EV company may receive an individually calculated duty rate at the definite stage based on its request. Dombrovskis elaborated that the union is ready to conduct a review of the situation and the subsidies the company has received in China.