Elon Musk’s Tesla has successfully negotiated a lower duty on its China-made electric vehicles (EVs) sold in the European Union (EU), amidst tensions between Musk and EU officials.

– **Duty Announcement**: The European Commission imposed duties up to 36.3% on imports of EVs from China due to unfair subsidies, but Tesla will only face a 9% tariff after obtaining individual treatment.
– **Background**: Tensions escalated last week when Musk criticized EU digital regulations, prompting backlash from EU leaders.
– **Tesla’s Advantage**: Unlike competitors, Tesla’s simpler structure and reliance on foreign financing helped secure lower tariffs. The commission concluded that Tesla benefits less from state aid than its competitors, allowing it to receive individual scrutiny during the investigations.
– **Comparative Tariffs**: With Tesla’s 9% tariff, it will have a competitive edge over EU and Chinese counterparts, whose tariffs range from 17% to 36.3%.
– **EU-China Relations**: The EU faces a growing trade dispute with China, further complicated by China’s plans to take the EU to the World Trade Organization over these tariffs.
– **Future Votes**: Member states will vote to finalize the duties by October 30, after gathering feedback until August 30.
– **Strategic Moves**: Tesla’s establishment in China without a joint venture is notable, contrasting with historical requirements for foreign automotive firms, allowing Musk to reap benefits from China’s supply chain.