
Tesla has taken legal action against the European Commission, challenging tariffs imposed on its Chinese-made electric vehicles. Filed by Tesla’s Shanghai branch, the lawsuit disputes the anti-subsidy measures enacted by the EU, which claim Chinese automakers have benefited unfairly from state support, allowing them to undercut European manufacturers.
The tariffs, implemented in October 2024, followed a lengthy investigation by the EU into Beijing’s support for its EV industry. These measures include tariffs of up to 35.3% on Chinese EVs, with Tesla facing a comparatively lower rate of 7.8% due to Beijing providing minimal financial backing to the company. The EU argues that these duties are necessary to shield its domestic industries from market distortions caused by China’s subsidies.
Tesla’s lawsuit coincides with similar challenges from automakers like BMW and several Chinese EV manufacturers. BMW has criticized the tariffs, arguing that they limit EV availability in Europe and could hinder progress toward emissions reduction goals. The German automaker has urged EU leaders to resolve the issue through diplomatic negotiations rather than escalating trade tensions.
Elon Musk’s growing criticism of EU policies adds further complexity to the dispute. Musk recently made headlines for appearing at a campaign event for Germany’s Alternative für Deutschland (AfD) party, sparking backlash from EU leaders. Additionally, Musk’s platform X is under investigation by the bloc for allegedly failing to address election-related interference.
Despite Tesla’s legal challenge, the EU insists that its tariffs are necessary to address Beijing’s aggressive trade practices, which include extensive subsidies such as free land, favorable loans, and tax incentives for battery producers. The EU’s measures aim to ensure fair competition within the rapidly growing EV market.
The US has similarly imposed steep tariffs on Chinese EV imports, signaling a broader Western effort to counter China’s economic policies. Tesla’s case, however, underscores the difficult balance between protecting domestic markets and maintaining global trade relationships.