Tesla set to hike electric car prices after European Union declares war on China with huge EV tariffs

Tesla electric vehicle showroom

Tesla could be forced to hike prices of its electric vehicles

REUTERS
Felix Reeves

By Felix Reeves


Published: 15/06/2024

- 11:51

The Tesla Model Y was the world's best-selling electric vehicle last year

Drivers are being warned of large price hikes hitting electric vehicles following a groundbreaking uplift in tariffs by the European Union, with major brands set to be affected.

Experts have stated that the price of Chinese-made electric cars could force Tesla to raise the price of its vehicles when selling across Europe.


Tesla has been leading the charge when it comes to major car brands cutting the upfront cost of its electric vehicles, by slashing prices around the world.

However, the brand is now warning that it will be forced to hike prices in some regions as a result of the European Union's newly imposed tariffs on goods made in China.

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Tesla Model 3

The price hikes could be seen after the European Union hiked tariffs on Chinese-made electric vehicles

REUTERS

Issuing a statement on its website, Tesla told motorists in Belgium, France, Germany, Hungary and Ireland to place their orders in June, although it did not state how expensive the vehicles would be.

It said: "We're anticipating a requirement for us to increase pricing for Model 3 vehicles as of 1 July 2024.

"This is due to additional import duties likely to be imposed on electric vehicles manufactured in China and sold in the EU."

The European Commission confirmed that tariffs would impact all manufacturers including BYD (17.4 per cent), Geely (20 per cent), SAIC (38.1 per cent), other EV brands which cooperated with the investigation (21 per cent) and all other brands which failed to help the EU (38.1 per cent).

In the UK, the cheapest Model 3 costs £39,990, while a new Model Y will set drivers back £44,990, with the brand consistently cutting prices.

The EU tariffs are also expected to have a massive hit on MG, Volvo and BYD, with prices likely to impact the ticket prices of popular electric cars.

Transport Secretary Mark Harper has suggested that the UK could follow suit and hike tariffs on Chinese vehicle manufacturers to protect British interests and legacy brands.

The Conservative manifesto acknowledged the unprecedented competition" the UK electric vehicle market faces from China, with the Tories pledging to "always back" British manufacturers.

It added: "We stand ready to support domestic car manufacturers if there is evidence other countries are breaking global trade rules."

It comes as the Tesla Model Y was named the best-selling vehicle in the world last year, according to data from Jato Dynamics.

For the first time ever, an electric vehicle topped the global car sales chart, having beaten out the previous leader, the Toyota RAV4 hybrid, with more than 1.2 million units sold.

Analysts stated that Tesla's sales record was even more impressive given its lack of presence in a number of emerging markets, with Felipe Munroz, from Jato Dynamics, saying Tesla is a "brand made for the developed world".

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Tesla Model 3

The Tesla Model 3 could become more expensive across Europe

REUTERS

The Tesla Model Y was also crowned Auto Trader's New Car of the Year 2024, while the Elon Musk-led company also picked up an award for having the best vehicle technology.

Electric vehicles dominated the Auto Trader New Car Awards 2024, with 11 electric models racking up almost half of the total number of awards on offer.

The Kia EV6 was ranked as the Best Car for Families, the Mini Electric was voted the Best Car for City Drivers and the Cupra Born won the prestigious honour of being the most fun car to drive.

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