Tesla faces loss of market value amid new tariffs on Chinese EVs
Date
8/29/2024 5:56:08 AM
(MENAFN) Tesla shares fell by about 2 percent during Tuesday's trading session, marking the second consecutive daily loss for the company in two months. Over the span of just two days, Tesla has seen a sharp decline in its market value, shedding approximately USD35 billion. These losses came in response to Canada’s announcement that it would impose a 100 percent tariff on electric vehicles imported from China. This new tariff policy affects all electric vehicles arriving from China, including Tesla models that are manufactured there. The move is part of broader efforts by Canada to counteract what it perceives as unfair trade practices and to protect its own automotive market from heavily subsidized foreign imports.
Adding to Tesla's challenges, the European Union has already put in place conservative customs duties of up to 38 percent on Chinese-made electric cars, citing concerns over Beijing's alleged illegal subsidies to manufacturers of these vehicles. The European Commission's imposition of these duties is part of an ongoing investigation into China's trade practices in the electric vehicle sector. The final decision on the matter is expected in November. These measures reflect a growing trend among Western countries to push back against perceived market distortions caused by Chinese state support for its industries, particularly in the rapidly growing electric vehicle market.
In a related development, the European Union announced a reduction in planned tariffs specifically on Tesla vehicles imported from China, cutting the rate from 20.8 percent to 9 percent. This decision may partially alleviate some of the pressures Tesla faces in the European market but does not offset the broader impact of the ongoing trade tensions. For Tesla, the tariffs in both Canada and Europe represent significant challenges to its international strategy, particularly in markets where it has relied on Chinese manufacturing to supply demand. As trade barriers rise, Tesla and other automakers with Chinese production bases may need to reassess their global supply chains and market strategies to navigate these new economic landscapes.
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