EU faces legal action from Tesla, BMW over tariffs on Chinese-made EVs

Tesla, owned by Elon Musk, is taking the European Union (EU) to court over its tariffs on electric vehicles imported from China. Filed last Wednesday with the European Court of Justice (ECJ) by Tesla’s Shanghai division, the lawsuit comes in the wake of similar legal moves by BMW and other Chinese car manufacturers.

The tariffs are part of the EU’s ongoing efforts to combat what it sees as unfair trade practices. A 2023 investigation concluded that Chinese EV manufacturers, including Tesla’s Shanghai operations, benefited from government subsidies like low-interest loans, cheap land, and supplier discounts.

Following the probe, the EU introduced steep anti-subsidy tariffs in late October 2024, with Tesla hit by a 7.8 percent rate and other manufacturers facing duties as high as 35.3 percent. These levies are in addition to the EU's existing 10 percent standard import tariff on vehicles.

According to The Financial Times, roughly 20 percent of all EVs sold in the EU last year — around 300,000 units — were manufactured in China. Tesla’s relatively low tariff rate stems from an individual review that determined the company received minimal support from the Chinese government compared to other automakers.

Tesla’s legal filing does not reveal specific details about its argument. The case against the European Commission will be heard in the General Court, the EU’s second-highest judicial body, with the possibility of appealing the verdict to the ECJ.

The entire legal process is expected to take around 18 months.