BMW, Tesla Sue EU as Row Over Tariffs on Chinese EVs Deepens

BMW and Tesla Shanghai alongside several other Chinese automakers are suing the European Union (EU) as the trade war over electric vehicle tariffs between China and the EU heats up. China’s EV industry is significantly more advanced than the rest of the world and the Asian nation has already begun exporting EVs in mass to other markets. However, with most Western automakers struggling to sell EVs profitably, China’s incredibly cheap EVs posed a nigh-existential threat.

The European Commission launched an investigation soon after Chinese electric cars started flooding into the EU. After determining that Beijing’s decade-long subsidy program had given its electric vehicle industry an ‘unfair advantage’ over markets in other countries, the commission decided to levy import tariffs on electric cars made in China to keep Western carmakers from being priced out of their domestic markets.

The commission initially levied provisional import tariffs of up to 39% on electric cars imported from China, but a majority of EU member states voted to levy higher tariffs in late 2024, effectively making it virtually impossible for China to sell its surplus of cheap electric cars in Europe. While these tariffs are targeted at Chinese automakers, Tesla and BMW have also been caught in the crossfire as they produce a significant portion of their cars in China.

In addition to the 10% tariff the EU levies on all vehicle imports, Teslas manufactured in China are subject to a 7.8% import tariff at EU ports while BMW electric cars made in China are subject to a 20.7% tariff. Both firms have now joined BYD, SAIC, Geely, and other Chinese carmakers who are taking legal action against the European Commission’s electric vehicle tariffs. They have each filed a case at the EU’s Court of Justice to fight the regional bloc’s EV import tariffs.

With more than two dozen member states, the European Union is a key market for both Tesla and BMW. They will undoubtedly pass the cost of the tariffs onto their consumers, making their already expensive EVs even more costly compared to electric cars manufactured within the European Union. The U.S. and Canada have also passed a tariff on electric cars made in China (100% in both countries), locking Chinese-made Teslas and other EVs from the American and Canadian markets.

Germany, where BMW is headquartered, was one of the EU member states that opposed placing steep tariffs on Chinese EV imports during the December 2024 vote. BMW also noted that despite the European Commission’s noble intentions, taxing electric cars made in China wouldn’t make European carmakers more competitive. A BMW spokesperson said the risk of retaliatory tariffs could hamper the transport segment’s decarbonization efforts by limiting the supply of zero-emission electric cars to customers in Europe.

EV makers like Mullen Automotive Inc. (NASDAQ: MULN) are likely to follow how the fallout from the EU tariffs pans out since it could have effects on the trajectory of the global electric vehicle market.

NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN

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