Proactive Investors - Shares in Chinese electric vehicle makers fell on confirmation that the European Union will impose tariffs as it resolved that the industry in China benefits from "unfair" subsidies.
As this is "causing a threat of economic injury" to EU rivals, it plans to impose variable tariffs from July 4, higher for some companies than others.
BYD, the world's best-selling EV manufacturer which was found to have received £2.9 billion in state subsidies, would face a 17.4% duty.
Geely, which owns Volvo, Polestar (NASDAQ:PSNY) and Lotus, would face a 20% tariff and MG owner SAIC Motor a tariff of 38.1%.
Tesla cars made in China "may receive an individually calculated duty rate", it added.
A 21% tariff would be applied to other Chinese battery EV producers that cooperated in the investigation, which include Western producers such as Tesla Inc (NASDAQ:TSLA) and BMW that export cars from China to Europe.
Companies that did not cooperate in the investigation would be subject to the 38.1% duty, which includes NIO Inc (NYSE:NIO).
Shares in NIO Inc (NYSE:NIO) fell 8.5% in Hong Kong but only 2.2% in New York, where Li Auto (NASDAQ:LI) Inc dropped 1.9%, Geely Automobile dropped 4.9% in Hong Kong while SAIC rose 0.6%.
Tesla shares rose 1.6% to $173.43.
The European Commission said it "reached out" to Chinese authorities to discuss the findings and explore possible alternative resolutions, but if these discussions do not lead to an effective solution the tariffs will be introduced.
Around 440,000 EVs were imported from China to the EU in the 12 months ending in April, worth €9 billion or around 4% of household expenditure on vehicles.
Andrew Kenningham, chief Europe economist at Capital Economics, said the decision "marks a big change in EU trade policy because, although the EU has used trade defence measures regularly in recent years, including against China, it has not previously done so for such an important industry.
"And Europe has been reluctant to engage in the kind of protectionism that the US has deployed since Donald Trump’s presidency."