- The EU has imposed tariffs of up to 38.1% on Chinese EVs.
- Joe Biden also launched a crackdown on Chinese EVs last month, hitting them with a 100% tax.
- Trade barriers come amid fears a wave of cheap Chinese brands could take over Western markets.
The EU is cracking down on China's EV companies.
The bloc will impose tariffs as high as 38.1% on EVs imported from China to Europe from next month, the European Commission said on Wednesday.
Tesla rivals BYD will face a tariff of 17.4%, Geely 20%, and SAIC Motor 38.1%. The EU previously had a 10% duty on imported EVs.
The European Commission launched an investigation into Chinese EVs last October, examining whether state subsidies in China were keeping the price of their electric vehicles artificially low.
Its conclusion comes after Joe Biden announced a sweeping set of tariffs in May on $18 billion worth of Chinese goods, including a 100% tax on Chinese vehicles.
Chinese-branded EVs have almost no presence in the US, thanks to existing trade barriers.
But in Europe, they have been making steady inroads, with Tesla rival BYD building a factory in Hungary and startups Nio and Xpeng releasing models in several European countries.
Chinese brands rose from under 1% of Europe's EV market in 2019 to 8% in 2023, according to the European Commission, and are expected to hit 15% by 2025.
Despite the crackdown, Philip Nothard, insight and strategy director at automotive services company Cox Automotive told Business Insider that the measures will not be enough to keep Chinese EV companies at bay in Europe.
"Even with tariffs, it's not going to slow the growth down," Nothard said.
"If you look at companies like BYD, they have a highly efficient manufacturing supply chain. That makes them extremely agile when it comes to changing products for different marketplaces," he added, suggesting that Chinese companies could adjust their growth plans to keep prices low even with new tariffs.
The trade barriers will also raise fears that China might retaliate with import duties of its own.
Chinese officials have hinted that the Asian superpower could impose taxes as high as 25% on imported cars in response to European and US tariffs.