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Tesla has filed a lawsuit against the European Union: what did Musk not like and how Chinese electric cars are involved

Darina GertsevaNews
Tesla has filed a lawsuit against the EU
Tesla has filed a lawsuit against the EU. Source: Digital information platform

Tesla has filed a lawsuit against the EU over anti-subsidy duties on electric vehicles from China, which amount to 7.8% for the company. The case will last about 18 months and may affect future trade regulations in the EU.

The Financial Times reports. The move was part of the ongoing tension between Tesla CEO Elon Musk and Brussels, which has recently been tightening regulation of the automotive market. In October 2024, the European Union introduced anti-subsidy duties:

  • 7.8% for Tesla;
  • up to 35.3% for other Chinese electric vehicle manufacturers.

These duties were in addition to the standard 10% import tariff that was already in place for the industry. The duties were prompted by an EU investigation that found that Chinese manufacturers had received unfair subsidies, including soft loans, cheap land leases, and financial support for suppliers such as steel mills.

According to Transport and Environment, in 2023, about 20% of all electric vehicles sold in the EU were made in China. Of these, 28% were accounted for by Tesla, which exports Model 3 models from Shanghai while producing Model Y at its European plant in Berlin.

Tesla received the lowest duties among all manufacturers because, according to the EU's individual analysis, the company received the least support from the Chinese government. However, Tesla's management believes that the imposed tariffs violate the conditions of fair competition.

The lawsuit was filed by Tesla's subsidiary in Shanghai with the EU's General Court, the second highest court in the Union. The case may take about 18 months to be heard, and its decision may be appealed to the Court of Justice of the European Union, if necessary.

The European Commission has expressed its readiness to defend its position in court. "We are ready to defend our case if necessary," commented Olof Gill, the European Commission's trade representative. The imposition of duties was part of the EU's efforts to protect the European market from the aggressive expansion of Chinese manufacturers, which use government support to reduce the cost of cars.

Tesla is not the first company to file a lawsuit against the EU over the new tariffs. Earlier, similar claims were made by BMW and several Chinese automakers.

At the same time, the political activity of Elon Musk, who is a critic of European regulation, also attracts attention. Some analysts believe that his support for far-right parties in the EU is harming Tesla's sales. According to Acea, in 2024, Tesla's sales in the EU decreased by 13% compared to the previous year.

The court's decision in this case could set an important precedent for the regulation of trade between the EU and China. If Tesla wins the case, it could affect future trade relations and the conditions for importing electric vehicles.

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