The Tesla Model 3 is now 1,500 euros more expensive than before. The US carmaker says the import duties imposed by the European Union (EU) on electric vehicles (EVs) rolling off the assembly line in China are the reason for this. At the same time, the European Commission is reportedly considering a lower import tariff on EVs from BMW and Volkswagen that roll off the assembly line in China.
Tesla is raising the price of the Model 3; the different variants of the car model are all now 1,500 euros more expensive. Whereas the cheapest version of the Model 3 - the RWD version - was previously available from 41,990 euros, buyers will now have to pay a minimum of 43,490 euros. The same price hike is also seen with the Long Range AWS and Performance AWD; the models are now available from 51,490 euros and 58,480 euros respectively.
Not unexpected
The carmaker had previously warned about the impact of import duties on the selling price of EVs. Tesla produces the Model 3 in Shanghai, China, and then imports the model to the EU. Tesla therefore has to pay an additional import tariff of 20.8% on these vehicles. The import tariffs do not affect the equally popular Model Y; that model rolls off the assembly line in Berlin, Germany.
Other carmakers producing EVs in China are expected to follow suit. These include BYD, Volvo, Polestar and MG. Although the import costs are expected to be partly borne by carmakers themselves, they are expected to partly pass them on to customers.
Not final
The import tariffs are not yet final, by the way; the European Commission talks about 'provisional tariffs'. The investigation into possible illegal state aid to Chinese EV manufacturers is still ongoing. Only once this investigation is completed will the EU announce final measures.
Until this time, negotiations with the Chinese government are ongoing. The European Commission and Chinese government have been in talks since the import duties were announced.
Possible lower tariffs for BMW and Volkswagen
Meanwhile, Reuters reports, citing sources, that the European Commission is considering imposing lower import tariffs on BMW and Volkswagen for EVs they manufacture in China. Under previously announced plans, both countries would be required to pay an import tariff of 37.6 per cent. However, the sources report that the European Commission may wish to reduce this to 20.8 per cent. The tariff would thus be the same as the import tariff that the US-based Tesla has to pay on models imported from China.
The difference in the import tariff initially imposed is because several models of both brands were not part of the analysis conducted earlier by the European Commission. In practice, this means that the models will automatically have the highest import tariff imposed: 37.6%.
Author: Wouter Hoeffnagel
Image: Josh via Pixabay
