Tesla, the US manufacturer of electric vehicles (EVs) run by Elon Musk, has filed a legal challenge against EU tariffs on China-made cars.
Brussels imposed a range of tariffs on EVs made in China at the end of October, following an anti-subsidy investigation last year. The rate set for Tesla was 7.8%, which is lower than a range of its competitors due to it receiving less support from the Chinese government.
The EV giant has nonetheless filed a complaint at the General Court of the Court of Justice of the EU (CJEU), a filing on the court’s website on Monday has shown.
‘Prepared to defend our case’
The filing was made last Wednesday, which was the deadline for cases to be lodged against the tariffs. The case could last about 18 months and could then be appealed, according to Reuters.
Olof Gill, a trade spokesperson for the European Commission (EC) is quoted in the FT as saying: “We’re prepared to defend our case in court as necessary.”
Tariff tussle
About a fifth of EVs sold in the bloc last year were manufactured in China, and Tesla accounted for 28% of these imports. This was nonetheless a decline of 13% on 2023 sales.
Europe is not alone in imposing tariffs on Chinese-made EVs, with the US setting 100% tariffs when Joe Biden was president. Allies, including Canada, have also raised similar levies, though the UK has not yet followed suit.
Biden’s successor, Donald Trump, pledged to set high tariffs on all Chinese imports into the US during the presidential campaign last year, though he has since said he “would rather not” impose levies, instead hoping to secure a deal of some sort with Beijing to address China’s trade surplus with the US.
Musk’s EU tensions
The intersection between Trump’s approach to EV tariffs and the ambitions of his ally Elon Musk, who leads the so-called Department of Government Efficiency (DOGE) within the new administration, will now be in sharp focus.
The tech billionaire has been vocal about European politics in recent months, backing the far-right Alternative for Germany party in the country’s upcoming elections.
Tesla makes some of its cars in Berlin. X (formerly known as Twitter), which Musk also owns, is also currently being investigated by the EU over its content moderation, the Guardian reports.
New registrations of Tesla EVs in Europe fell 13% in 2024, according to Acea, the European car association, with Musk’s political interventions thought to be a factor in this decline.
UK position unclear
In the UK, business and trade secretary Jonathan Reynolds is yet to follow allies by raising tariffs on China-produced EVs, saying in October that no formal complaints from the auto sector had been lodged.
However, following falling consumer demand for EVs in 2024, Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said to the Manufacturer that global competition in the sector was “only going to heat up in 2025 as countries vie for major new automotive investment”.
He said that “rapid” regulatory review was needed to encourage consumers in the UK to buy more EVs:
“We need rapid results from the regulatory review and urgent substantive support for consumers – else automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share in jeopardy.”
Strategy needed
Paul Brooks, manufacturing lead at the Chartered Institute of Export & International Trade, has said that the UK needs to ensure it doesn’t fall behind in the EV market due to potential “inertia” caused by the geopolitical uncertainty in the sector.
“The US, EU, China and other major developed nations are all jostling for position in the EV market, and this could be heightened by Trump’s return and Musk’s being part of his administration.
“It appears as though the UK is biding its time and is wary of being caught up in this tussle, but it shouldn’t allow geopolitical inertia to get in the way of supporting its own industry.
“It remains clear that the government needs to ensure that it has plan for the UK automotive sector to ensure it remains competitive and isn’t outpaced by geopolitical events. The upcoming Trade and Industrial Strategies will need to address this.”
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