
Tesla has filed a lawsuit against the European Commission over tariffs imposed on electric vehicles imported from China. The company’s Shanghai division brought the case to the European Court of Justice, challenging the duties implemented by the EU to counter alleged Chinese government subsidies.
The tariffs, enacted in October 2024, were based on findings that Chinese automakers benefited from extensive state support. Subsidies included tax breaks, low-interest loans, and free land for manufacturing facilities. These measures allowed Chinese companies to produce vehicles at significantly lower costs, prompting the EU to introduce tariffs ranging from 7.8% to 35.3% depending on the level of subsidy received.
While Tesla faces the lowest tariff among importers, the company relies heavily on its Shanghai factory to supply vehicles to Europe. Tesla’s legal action joins similar complaints filed by BMW and Chinese manufacturers, who have criticized the tariffs for disrupting global trade. BMW has argued that the duties harm consumers and hinder efforts to expand electric vehicle availability in European markets.
Elon Musk, Tesla’s CEO, has added to the controversy by publicly criticizing EU leadership and appearing at a campaign event for Germany’s Alternative für Deutschland (AfD) party. This appearance, combined with Musk’s outspoken stance against EU policies, has deepened tensions between his company and the bloc. Meanwhile, the EU is also investigating Musk’s social media platform X for alleged election-related violations.
In response to the investigation, EU officials emphasized the need to protect domestic manufacturers and ensure fair competition. They argue that the subsidies provided by China’s government distorted the global EV market, necessitating protective measures.
In 2023, Tesla accounted for nearly a third of all Chinese-made EVs imported into Europe. Despite its lower tariff rate, Tesla’s reliance on imports from Shanghai makes it a key player in the broader trade conflict between China and the EU.