Questions and Answers on the disclosure to interested parties of draft definitive findings of anti-subsidy investigation into imports of battery electric vehicles from China

This article is brought to you in association with the European Commission.

Why have the proposed duty rates changed?

The small upward or downward adjustments to the duty rates of the sampled companies reflect technical corrections based on substantiated comments received from the interested parties on the provisional measures.

These revisions show that the Commission fully respects all relevant rules and obligations, and bases its findings strictly on facts and evidence.

It similarly proves that the greatest care is taken to ensure that the investigation is both robust and correct.

Moreover, it proves that the EU is fully transparent and does not fear submitting the accuracy of its calculations to detailed inspection by the companies concerned and does not hesitate to adjust its findings when warranted.

The revision of the rate applicable to “cooperating, non-sampled companies” resulted from a technical correction in the average calculation.

Would the duties be added on top of the current import duties of 10%?

Yes, countervailing duties would be added on top of the ordinary import duty of 10% levied on imports of battery electric vehicles.

Why did Tesla receive an individual duty rate?

As announced at the provisional measures stage, Tesla submitted a substantiated request for an “individual examination” to determine its duty level based on the specific subsidies it received.

This request has been under thorough examination and the assessment of the level of subsidies received is reflected in the duty levels at the definitive stage.

The Commission verified the information during the verification visit in China and conducted the same checks as of the other sampled Chinese exporting producers.

Any differences in duty levels reflect the varying levels of subsidization among the different schemes, which were affected by various elements, such as the level of cooperation and the different organizational structures in areas like financing.

Why did the Commission decide against the retroactive collection of the duties?

On 6 March 2024 the Commission started the registration of imports of battery electric vehicles from China in view of the potential retroactive collection of duties. The findings of the investigation, as outlined in the draft definitive measures disclosed today, indicate that the legal requirements for the retroactive collection of duties are not fulfilled. Accordingly, there will be no retroactive collection of provisional countervailing duties or retroactive collection of duties for the registered imports for the 3 months period before the imposition of provisional duties.

Therefore, the amounts secured by way of the provisional countervailing duty, should be released and not collected. A final decision on this matter will only be adopted upon the publication of the definitive regulation by 30 October 2024, at the latest.

Why have certain joint ventures with EU producers – which originally did not import during the investigation period – been granted ‘new exporter’ status and will thus benefit from the lower duty rate for non-sampled cooperating companies?

Several Chinese exporting producers, including certain joint ventures with EU producers, which did not initially export during the investigation period and would be subject to the higher residual duty rate, requested to be included in the list of cooperating producers in order to benefit from the lower duty rate foreseen for their related companies.

The Commission further investigated this issue. Among the parameters analysed, elements such as being related to a cooperating producer, having production of BEVs -or having substantiated evidence of plans and investments for the production of BEVs – during the investigation period, and imminent exports to the Union, were considered.

The draft definitive findings therefore conclude that, with the exception of an unjustified request, these companies should benefit from the duty established for the cooperating group in which they are integrated. The decisions taken on this subject are in line with our legal framework and WTO-compatible.

What are the next steps?

On 20 August 2024 the Commission disclosed to interested parties, including Chinese companies and Member States, its definitive findings in the anti-subsidy investigation. The Government of China was also notified and received full disclosure.

This final disclosure takes into account comments by interested parties and hearings held with them following the imposition of provisional measures in July 2024, as well as the conclusion of a number of investigative steps that had not been finalised at provisional stage.

Interested parties now have 10 days – until 30 August 2024 – to provide comments and request hearings on the final disclosure.

Once the Commission has assessed the comments received by interested parties, the draft regulation will be submitted to the Trade Defence Instruments Committee (‘TDC’), composed by representatives of the Member States.

The opinion of Member States will be delivered under the examination procedure, according to Comitology Rules (Commission proposal adopted unless there is qualified majority against it). This vote will have binding effect.

A Commission Implementing Regulation including the definitive findings in the investigation will be published in the Official Journal by 30 October 2024, at the latest.

Any potential measures will be in force for 5 years, extendable upon substantiated request and subsequent review.

When will Member States vote on the duties?

The TDC holds regular meetings – the Commission cannot confirm at which meeting the draft regulation will be discussed.

Does the WTO consultation request on the provisional measures submitted by China have an impact on the anti-subsidy investigation?

The two proceedings follow separate tracks. There is no impact on the timeline of the ongoing investigation, the investigation follows its course.

The EU is carefully studying all the details of China’s WTO consultation request and will react to the Chinese authorities in due course, according to WTO procedures.

The Commission is confident of the WTO-compatibility of its investigation and provisional measures.