Tesla is warning some customers that it will raise prices on its Model 3 as the European Union introduces new preliminary import tariffs on China-made electric vehicles.
“We’re anticipating a requirement for us to increase pricing for Model 3 vehicles as of 1 July 2024,” a notice on some of Tesla’s European websites said. “This is due to additional import duties likely to be imposed on electric vehicles manufactured in China and sold in the E.U.”
The notice is displayed on Tesla’s websites for several European countries, including Germany — one of the top global markets for EVs and where Tesla operates a factory — and Hungary. The U.S. automaker did not disclose the size of the expected price hike on the Model 3, which in Germany starts at $44,000.
The E.U.’s regulatory arm, the European Commission, said Wednesday it would put a range of tariffs on imports of Chinese EVs to the continent, after probing Beijing’s “unfair” subsidies for domestic electric car companies. That includes a 17.4% duty on cars made by BYD and tariffs as high as 38.1% for vehicles made by SAIC.
Other battery EV makers that cooperated with the Commission will be slapped with duties averaging 21%, while those that declined to work with regulators will be hit with 38.1% tariffs. That’s all on top of the E.U.’s existing 10% levies on battery EVs.
The new duties will come into effect on July 4, assuming that China’s government doesn’t strike a deal with the 27-member European bloc to prevent them. More definitive tariffs are expected to be imposed by mid-October. So far, Tesla is the only company that may receive an individually calculated duty rate at the definitive stage, per its request.
Tesla has operated a manufacturing plant in Shanghai for several years, where it makes the Model Y SUV and the Model 3 compact. The factory is a major performer for CEO Elon Musk’s company, which in May began building its Shanghai Megafactory, its first dedicated energy storage facility outside the U.S.
Musk, in response to the U.S.’s own newly-imposed tariffs on Chinese EVs, criticized the move while speaking at the VivaTech conference in Paris late last month. The CEO said that “neither Tesla nor I asked for these tariffs,” adding that he is in favor of “no tariffs and no incentives for electric vehicles, or for oil and gas.”