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Tesla to Hike Model 3 Prices in Europe

Tesla is up to increase the cost of its Model 3 cars in Europe starting July 1, EU plans to implement higher tariffs
June 13, 2024

In a recent development that could impact electric vehicle (EV) buyers across Europe, Tesla announced plans to increase the price of its Model 3 cars from July 1. This decision follows the European Union's move to impose higher tariffs on EVs imported from China.

Tesla's website revealed that the anticipated price hike is directly tied to these new import duties. The EU's executive arm, the European Commission, has determined that the Chinese EV sector benefits from unfair subsidies, leading to the proposed tariff increases. While Tesla has not yet specified the exact amount of the price increase, the company is preparing for this change.

The European Commission's investigation into the Chinese EV market found significant subsidization throughout the battery-electric vehicle value chain. As a result, provisional tariffs are set to be enforced starting July 4, unless a resolution is reached with Chinese authorities. If no agreement is achieved, definitive measures will be in place four months later.

Currently, Chinese-made EVs face tariffs of up to 38.1%. While some manufacturers have been assigned specific duty rates, Tesla's exact tariff remains undetermined. The Commission indicated that Tesla might be subject to an individually calculated duty rate.

Shanghai, home to one of Tesla's largest Gigafactories, plays a crucial role in the company's production and export strategy. In 2023, Tesla's Shanghai factory delivered 947,000 vehicles, with 600,000 sold within China and the remaining units exported, according to Chinese state media.

As the EU's new tariffs loom, Tesla's strategic response will be closely watched by both industry analysts and potential buyers. The price adjustments could influence the competitive landscape of EVs in Europe, further complicating the market dynamics between local and imported electric vehicles.

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